Asset Protection and Preservation

Asset Protection and Medicaid

Most estate planning has an asset protection planning component. Whereas traditional estate planning includes objectives such as avoiding tax consequences, protecting assets of minors and disabled adults, preserving assets for retirement or for a surviving spouse or protection from creditors, asset protection planning in the context of elder law usually involves planning for Medicaid eligibility.

In the context of Medicaid eligibility, asset protection planning takes on a different urgency. Too many middle class seniors are faced with the prospect of a double disaster – first they may lose their health, and second, they may lose their lifetime savings to the catastrophic costs of long‐term care. With the average annual cost of a nursing home in Illinois of about $50,000.00, it doesn’t take long for an elderly person or couple to spend down their entire life savings and only then be eligible for Medicaid.

Whether pre-crisis or in-crisis, effective planning can be accomplished to preserve assets for the spouse, the supplemental needs of the Medicaid recipient or future generations. Medicaid rules can be complex and confusing but there are exceptions to the impoverishment guidelines. Special planning strategies and techniques are used to legitimately protect income and assets while obtaining Medicaid eligibility. An experienced elder law attorney will be able to explain Medicaid in simple terms, identify planning opportunities and implement the plan thereby reducing the stress and worry associated with the fear of impoverishment.

Cristy Tackett-Hunt
Melissa L. Uzzell