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Most
clients' goals are simple: at the time of retirement they would like to
be able to comfortably support themselves, their spouses and family
members and leave sufficient assets to take care of succeeding
generations. The best elder planning is to have sufficient resources at
the time of retirement to accomplish these goals. However, even the best
planning cannot always anticipate the possible catastrophes that can
happen to any family. Many times we can identify savings and planning
opportunities for our clients helping them achieve their goals and be as
prepared as possible for the future and the possibility of
“catastrophes.” There are several ways for clients to begin protecting
family savings and assets from the high cost of a nursing home or
assisted living stays now — long-term care insurance, asset transfers to
adult family members or setting up protected trusts or "side funds"
through a or special investments or an annuity.
Long-term care insurance is one of the best options
for protection because it allows clients to choose from several home
health care options including in-home care, independent or assisted
living instead of nursing home care. For married couples, the home care
option may protect the spouse not requiring the care from compromising
his or her own health and finances with the heavy burden of care giving
in their later years. The main objection most clients have to purchasing
long-term care insurance is the expense.
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There are several other options to consider:
The first of those are asset transfers to children
or other relations which may be effective for protecting assets or
reducing your “resources” for Medicaid calculations. We assist our
clients set up their estate planning and then navigate through the
seemingly endless governmental red tape the family is faced with when a
member of the family is diagnosed with a debilitating illness or mental
condition and needs assistance from Medicaid.
Medicaid is a governmental program which fills in
for families who fall under certain “income” and “resource” levels.
In order to qualify for Medicaid the client must have a very limited
“income” and even more severely limited “resources” (assets). Do
not transfer assets without seeking the advice of a qualified Medicaid
attorney. Transfers made without proper planning can disqualify a person
for Medicaid and leave them without the resources to pay for care
privately. This is the worst of both worlds.
Another option for persons planning ahead who cannot get long-term
care is to set aside a protected “side-fund” with an Irrevocable
Medicaid Trust or a Special or Supplemental Needs Trust (SNT)
and to offset the income with a Miller Trust or a Qualified
Income Trust. An “income only” trust and the SNT must name
someone other than you or your spouse as the trustee, usually one or
more adult children, and limits the access to the income allowing you to
qualify for Medicaid but holding the resources for the benefit of the
client or his or her family.
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