Asset preservation isn’t just for the wealthy
Many people have the misconception that in order to engage in asset protection, they must have significant wealth. While some families are seeking to preserve their assets for their children and grandchildren, many seniors want to protect their home and savings from catastrophic nursing home costs. All seniors should be concerned about the protection and preservation of their assets because the statistics indicate that most people over age 65 will likely use institutional care, such as a nursing home, at some point in their lives.
Planning now saves time and money later
As a loved one ages, it’s important to design a strategy for using their income and assets in the most effective manner. Working with a Certified Elder Law Attorney (CELA) to implement a plan for asset preservation will allow them to receive the best quality care regardless of the setting, allow for financial independence of a well spouse and increase the potential of leaving an inheritance.
Avoid catastrophic nursing home costs
Medicaid asset protection involves preparing a thorough plan. You can transfer your assets to close family members or to an irrevocable trust in order to lessen the amounts available and thereby qualify for Medicaid benefits. Transfers that occur within five (5) years of nursing home admission will create a period of ineligibility for Medicaid. Is you loved one entering the nursing home now?
CLICK HERE FOR INFORMATION ON OBTAINING MEDICAID ELIGIBILITY.
Quality Planning Requires a Professional
Tax considerations also play a key role in Medicaid asset protection. Tax consequences for income, capital gains and gift tax must be considered. A Medicaid plan is generally designed to be tax neutral. But, failure to plan properly can result in additional taxes being owed.
Asset Preservation – Revocable Living Trusts
An RLT can be a great tool if you are concerned about such issues as future incapacity during your lifetime and the impact of probate on your heirs after you die. An RLT allow you to control your assets both during your life and after your death.
Yes, it’s an ideal tool to make sure your children and your current spouse are treated fairly and eliminate future discord or delay when distributing your assets after you die or should you become incapacitated.
Planning for incapacity by establishing an RLT, allows you to avoid the probate court taking control of your assets should you ever require a Guardian or a Conservator. A well-drafted RLT sets forth your instructions for your assets and your care should you become incapacitated. Your successor trustees are bound by law to follow your instructions during a difficult time. An RLT saves time and substantial money by avoiding probate court costs, legal fees, and conservator fees.
Protecting assets with an RLT means potentially eliminating the need for probate altogether ( if you create and fund your trust properly) You can also help to prevent disputes over an estate and keep your personal business “private” after your death.
There are two types of death taxes. Federal and state inheritance taxes. In Georgia, we do not have a state inheritance tax. The federal estate tax is still around but only impacts very large estates. For 2021, the threshold for federal estate taxes is approximately $11.7 million for a single person and around $23.4 million for a married couple. According to the Urban-Brookings Tax Policy Center only about 4,000 estate tax returns were filed in 2019 of which only 1,900 were taxable. If you are concerned about Federal estate taxes, we recommend a consultation with a highly qualified tax attorney.
- Eliminate the need for a Conservator
- Avoiding Probate in Georgia and any other state where you may have assets
- Control your assets after you die
- Prevent estate disputes