Good Time For Asset Protection Planning Is Now

Hard work and savings are a point of pride for many Americans. A comfortable and well-earned retirement and twilight years is a fitting reward for one’s life’s work and financial responsibility.

However, old age can present challenges that rapidly deplete even substantial savings. Consider the cost of nursing home care. It can easily reach over $8,000 per month. Personal savings, public assistance, and even private insurance will often come up short against such an expense.

You know that planning for the future is important. But in the case of asset protection, executing on a plan before the protection is necessary is especially beneficial. This is because of the Medicaid look-back period. This is a period of five years prior to an individual applying for Medicaid. During this period, transfers of assets, such as to a trust for one’s own benefit, can incur a period of Medicaid ineligibility.

One key asset protection tool involves exactly this sort of transfer. An asset protection trust is designed to protect your hard-earned savings from the tremendous expense of nursing homes and other threats. It involves transferring your savings to a trust, where it is available to be spent for your benefit.

For purposes of determining Medicaid eligibility, the trust does not count as your property. However, the initial transfer of funds can make you ineligible for up to five years from the date it occurs. After the trust is created, each month in which Medicaid is not needed runs down the potential period of ineligibility.

It’s easy to see the importance of creating the trust and starting that clock. Remember, it is never too early, or too late, for estate planning. You can rely on Hazen Law Group no matter your situation or stage of planning. We are here to help.