ASSET PROTECTION TRUSTS What is it and why you most likely need one!
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A Medicaid Asset Protection Trust is an irrevocable trust that allows individuals to transfer assets out of their name while still benefiting from the assets indirectly. Once assets are placed into the trust, they no longer count as part of the individual’s personal assets for Medicaid eligibility purposes. However, because the trust is irrevocable, the grantor relinquishes direct control over the assets.
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Protecting Assets for Future Generations: An Asset Protection Trust allows individuals to secure their assets for their children, grandchildren or other beneficiaries instead of spending them down on long-term care.
Qualifying for Medicaid without Depleting Assets: Applicants for Medicaid (for both in home care and long-term care communities) must meet strict financial eligibility criteria. By transferring assets, such as your home, real property, and other accounts into the trust well in advance, individuals can preserve their wealth while meeting Medicaid’s requirements.
Providing for a Surviving Spouse: When an Asset Protection Trust is property drafted, it can ensure that a surviving spouse has financial resources while still qualifying for Medicaid assistance.
Avoiding Probate: Assets held in the trust do not go through probate which makes sure your family and survivors have a smooth transition after the grantor’s passing.
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The asset protection process involves taking steps to identify threats to your wealth and trying to minimize those threats. Most people focused on asset protection consider ways in which money and property can be lost during their lifetime, as well as what will happen after they are gone. Some of the biggest threats most people face to the wealth they have acquired include:
· Losses due to creditor claims
· Losses due to heirs being irresponsible with money
· Losses due to a court judgments (your business too!)
· Losses due to divorce
· Significant expenditures for nursing home costs
· Significant expenses for medical care
· Estate taxes which reduces the value of their estate
There are many different legal tools available under the law that can mitigate or even eliminate these risks. For example, the creation of an asset protection trust can be beneficial in protecting assets in case you must go into a nursing home, as well as in making sure heirs do not lose assets and in keeping assets beyond the reach of creditors or ex-spouses.
Are you concerned about the uncertainties that lie ahead as you or your loved ones age? Do you worry about how to navigate the complex world of healthcare, long-term care, and estate planning? At Khaled Elder Law, Julia and her team understand the challenges that come with planning for the future, which is why the firm offers comprehensive Irrevocable Asset Protection Trust Plans where Attorney Khaled will hold your hand (and give you lots of lists) throughout the entire process. She often has a final meeting simply for you to ask questions again, as the process can be complicated if you are not guided step by step.
Khaled Elder Law will customize a care plan just for you! This plan will serve as a road map to help you and your family meet the inevitable challenges of caring for an aging family member while also protecting your assets. The approach may continue for the duration of the client’s life. Attorney Khaled will rely on an inter-disciplinary team (geriatric care manager, nurse, and care coordinator) that works to identify present and potential future care needs, locate appropriate care if so desired and needed, and ensure high-quality care. This approach relies less on crisis-oriented responses and more on the development of on-going relationships with families.
