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The 7 Frequently Asked Questions About Asset Preservation

Medicaid Planning, Long Term Care, Asset Preservation, Estate Planning – They All Have the Same Concern – Protecting Your Loved Ones

As a Dallas elder law attorney, I work with a lot of families on asset preservation and protection. When a family member has been diagnosed with Alzheimer’s or another disabling health condition, it’s easy to feel overwhelmed by the many legal and financial questions that can arise as a result of the diagnosis. Determining how to pay for long-term care is often confusing for families.

It is important to find an elder care attorney with whom you feel comfortable and who has the experience to advise you on these elder care matters. At the Law Offices of Dan Chern, we make it a priority to help you get the answers you need and determine the best possible options for you and your family. I hope these questions and answers will help you, and once you’ve had a chance to read them, please give me call.

#1: What legal matters should be discussed when a family member can no longer function independently?
There are several legal issues to consider when a person is (or may become) incapacitated:

  • Managing of the individual’s financial affairs during the course of his or her lifetime;
  • Managing the individual’s personal care, including decision for medical care, residence, placement in a nursing facility, etc.;
  • Arranging for funding of long-term health care, including the use of private insurance, Medicare, Medicaid, and Supplemental Security Income (SSI);
  • Preserving of family assets: making sure that the patient’s spouse and disabled family members are thoroughly protected; and
  • Distributing the individual’s assets upon his or her death. (If the person’s spouse, child, or family member is disabled, then they may wish to provide for special arrangements)

#2: When should an elder law attorney be consulted?
Consult an elder law attorney as soon as possible. The earlier you start, more planning options will be available while your loved one still has the legal capacity to make their own decisions. The question of capacity is a gray area, and must be determined on a case-by-case basis. The longer you wait, can possibly limit our options in planning.

#3: What are the options for managing assets?
When deciding how to manage assets, you can consider:

  • Revocable living trusts; Special Needs Trusts
  • Durable Powers of Attorney;
  • Designating a representative payee; and
  • Conservatorship (or Guardianship) of the estate and of the person

Each of these has advantages and disadvantages, which should be discussed thoroughly with an elder law attorney.

#4: What are the options for paying for long-term care?
Presently you have four possible solutions to paying for long-term care. Two of the options you control, the other two the government controls.

  • Private Pay (using your assets)
  • Long Term Care Insurance (traditional, Hybrid Life/LTC and Annuity/LTC rider
  • Medicaid
  • Veterans Benefits (aid and attendance)*

*If the person served in the military during a time of war and was honorably discharged, VA assistance may be available.

#5: Can any assets be protected for the spouse at home?
A variety of planning options may be available to finance long-term care. Everyone has different circumstances; i.e., marital status, age, mental capacity, and health of the individual. Medicaid may pay for care in a facility. The rules concerning planning in Texas can be complicated, so speak with me about this.

Your options for asset protection can include:

  • Conversion of non-exempt assets into exempt assets;
  • Transferring your family residence to a family member or spouse;
  • Transferring your primary residence while retaining a life estate;
  • Using court orders to increase the resources and/or income that the spouse of a nursing home resident can retain;
  • Utilizing certain types of Trusts; and Lady Bird Deed
  • Gifting assets.

Each option has important implications, which is why it is crucial that you thoroughly discuss your decisions with a knowledgeable Medicaid attorney.

#6: How can I provide for my estate distribution when I die?
When distributing assets upon death, your options are:

  • Joint Tenancy Accounts
  • Payable on Death Accounts
  • Revocable Living Trust
  • Transfer with a Retained Life Estate
  • Will

Each of these has significant legal ramifications and should be discussed with a knowledgeable estate planning attorney like myself. Also, some financial products, such as life insurance, IRA’s, retirement plans, and annuities, provide for the distribution on death to a designated beneficiary.

#7: What kind of elder law attorney should be consulted?
Most lawyers typically concentrate on one or two specific areas of law. It is important for caregivers to hire attorneys who have the appropriate and holistic experience in several areas of law. Lawyers advising caregivers on planning for long-term care should have knowledge of the following areas of law:

  • Medicaid laws
  • Social Security (if applicable)
  • Veterans Benefits (aid and attendance)
  • Various Trusts ( revocable, irrevocable, and special needs trusts)
  • Conservatorships and Guardianships
  • Durable power of attorney for health care and asset management
  • Tax (income, estate and gift) planning

Not all attorneys have experience with all of the above-mentioned areas. In some cases, they may defer questions about social security or income tax questions to other advisors that they work with. But most any reputable elder law attorney who focuses on asset preservation should know about Medicaid, Types of Trusts and their uses, Powers of Attorney, Guardianship issues, and the gifting tax rules.

Planning for the eventual possibility of incapacity is something most all of us will experience in our lifetime. We will either be a caregiver or a care receiver, but it’s inevitable that we’ll have a family member or know someone that is dealing with these issues. The most important aspect you should remember is to make sure you, your immediate family and those of your spouse, if married, all establish a plan that can be implemented before it becomes too late. It is much, much better to be proactive rather than reactive.

Too many families ignore these issues believing that it will never happen to them, and then when the unexpected crisis happens, they quickly run out of options and like so many, watch their loved ones estates being spent away because they failed to plan.

Don’t let this happen to your family – give my office a call at 972-516-9911 and ask for me – Dan Chern. I’ll be happy to meet with you at my office, or if necessary, your home or health care facility. For more information about my services please contact us or schedule a complimentary consult .

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