August 22, 2016
Why Protect Assets From Long-term Care Costs?
For anything we do in life, it is important to start with the “why” of why we are doing something. It is no different when discussing asset protection planning in Michigan. Why protect assets from long-term care? What is the point of it? Why work with an elder law attorney?
It certainly isn’t because people like attorneys. There are enough lawyer jokes out there. That said, elder law lawyers are the good ones, where we’re not chasing ambulances or representing drunk drivers. We’re helping good families plan and protect what they value.
So again, why plan and protect what you value? For every family the answer is different. But generally, the reason to engage in asset protection to protect against long-term care costs falls into one of two categories.
Protect Assets From Nursing Home Care To Preserve Quality of Life
Single or widowed clients have two choices when it comes to paying the devastating cost of long-term care. They can do nothing and spend upwards of $10,000 per month in nursing home costs until they run out of money, at which time Medicaid will pay for the care. Option 2 is the clients plan and protect their assets (often times with an asset protection trust), so that Medicaid can pay the base level of care then we can have a bundle of assets in the asset protection trust to pay for additional services (for example more caregivers).
By protecting assets you’ve now created a situation where you can receive more care or use the assets in a way that you want, versus all the assets going to the nursing home.
Protect Assets From Nursing Home Care to Preserve the Quality of Life of a Healthy Spouse
Another reason to consider asset protection planning to protect against nursing home spend down is to preserve the quality of life of the healthy spouse. For example, let’s take a client situation (the names have been changed). Judy enters the elder law attorney office in tears because her husband of 40+ years, Bill, has advanced dementia and needs long-term care in a nursing home. She is in tears because she doesn’t know how she’s going to pay the over $10,000 per month nursing home bill without becoming completely impoverished. She is younger, healthy and should have a long life ahead of her.
But, paying the $10,000 per month nursing home bill will drain down their savings until she’s basically impoverished. At which time Medicaid will step in.
However, by working together we were able to move those assets into an asset protection trust and protect all $300,000 of their hard earned life savings and Bill was able to get the best care in a nursing home just down the road from their home, so Judy was able to visit daily. At the end of the day Bill receives the care he needs and Judy has the peace of mind that she will not be impoverished just because her husband had dementia.
Asset Protection Isn’t Just About Protecting Money for Money’s Sake
Asset protection is not just about protecting assets to protect assets. Protecting assets is about preserving your values and what you value. Much of it is about choice, protecting your choice. By protecting your resources and bringing in additional resources we are protecting your ability to make choices, choices in care. The way the system is set up, the more money and resources that you have or that you can protect, the more choices you will have…and the better quality of life. That is why we focus on planning to protect and preserve what you value.
Learn if Asset Protection Planning is Right For You
The next step is to learn if asset protection planning is right for you. You attend one of our weekly LifeCare Planning workshops by clicking here are you can attend our upcoming webinar on asset protection planning and trusts August 30th at 2pm by clicking below.