Asset protection will prevent financial disaster.
Asset protection, permitted under federal and state rules, is a legal process that:
- Allows an individual and/or their spouse to receive the best quality care regardless of the setting;
- Insures financial independence of a well spouse; and
- Increases the potential of leaving an inheritance by securing assets before they are depleted.
Asset protection is designed for middle-income families to prevent financial disaster and involves preparing a thorough plan. In every case, we have found that between 40 to 100 percent of a person’s assets can be protected. The earlier you plan, the more assets you are able to protect.
As one ages, it becomes increasingly important to employ effective strategies for using income and assets in the most effective manner. Ritter Elder Law & Estate Planning specializes in helping people protect their assets through appropriate legal means.
Asset Protection is Not Just for the Wealthy
Many people have the misconception that in order to engage in asset protection they must have significant wealth. In fact, asset protection is designed for middle-income families to prevent financial disaster. While some families are seeking to preserve their assets for their children and grandchildren, most seniors want to protect their home and assets from catastrophic costs. All seniors should be concerned about the protection and preservation of their assets; statistics show that 70 percent of people over age 65 will likely need long-term care at some point in their lives. The cost for skilled care in the Washington, D.C. metropolitan area can exceed $10,000 per month.
Tax considerations also play a key role in asset protection. Tax consequences for income, capital gains, and gift tax must be considered. An asset protection plan is generally designed to be tax neutral. But failure to plan properly can result in additional taxes being owed.
Payment of Chronic Care Costs
There are three payment sources for chronic care costs:
- Private Pay: Under private pay, the individual or family pays the cost of care from personal savings. In many cases, the individual pays until he or she is impoverished, and then turns to public benefits.
- Long-Term Care Insurance: This insurance pays for care needs when an individual needs assistance with two or more activities of daily living. Fewer than 1 percent of nursing-home residents are covered by long-term care insurance.
- Entitlements: There are three types of publicly funded entitlements—Medicaid, Medicare, and veterans’ benefits:
- Medicaid: Medicaid is the major source of funding for residents of skilled nursing facilities. Well over half of all SNF beds in America are paid for by Medicaid for the purpose of rehabilitation.
- Medicare: Medicare will pay for skilled nursing care for a maximum of only 100 days.
- Veteran’s benefits: The VA operates nursing homes and has other programs such as Aid and Attendance, but eligibility is restricted to veterans and their families.
Contact Ritter Elder Law & Estate Planning
Figuring out how to pay for chronic care can be frustrating, confusing, and confounding. Just the amount of paperwork required to file for benefits can be overwhelming and demoralizing. Failure to apply properly can be grounds for denial. Even if the paperwork is filled out properly, state governments frequently fail to meet certain federally imposed guidelines regarding the granting of Medicaid applications. When applying for Medicaid and other benefits, it is crucial for applicants to be well versed in how the systems work. Our firm represents clients before county Medicaid agencies and prepares and files benefit applications on their behalf. In the event of a contested application, the firm stands ready to represent clients in an agency hearing to obtain approval for benefits. We do the same for Medicare and veterans’ benefits.
Contact us to schedule a consultation and learn more about how we can assist you and your family with this important planning option.