Top Five Asset Protection Myths & Mistakes

Clients frequently come to our office having heard myths about Medicaid and other public assistance programs for seniors needing long-term care.  If acted on, these myths can have disastrous consequences; you can lose potential benefits and/or you family will end up paying thousands of dollars in unnecessary taxes.  We also see clients making the same types of asset protection mistakes repeatedly. The following information will help readers make better choices.

The most frequent myth that we hear is that if you are middleclass or well-to-do family, you can’t qualify for Medicaid or other government programs.  Not true.  While the rules can be complex, with good representation, most family can qualify for Medicaid in a Nursing Facility and other programs as well.  Another myth we hear often is that if you are poor, then you can quickly qualify for all government assistance programs. This is the myth that pushes uninformed folks to give away their homes and nest-egg to their children hoping to become eligible for needed financial help. Unfortunately, it is possible that your Social Security income alone may be too high for you to qualify for some assistance programs, even if you do not have any assets. This is because programs such as Special Assistance, for assisted living care, and Medicaid at Home, for those who wish to remain in the community, require you to have less than approximately $1,150 a month in income. Many people fall through the cracks if their income is over this threshold, even if they are otherwise destitute. However, the opposite is true for Medicaid. If you require nursing facility care and have good income and substantial assets, then you can still qualify for Medicaid with the help of an experienced Elder Law attorney.

Another myth is that if you are already in a Nursing Home or Assisted Living Facility that your only option is to privately pay until you are destitute; you cannot then “spend-down” or “convert” your assets to quickly qualify for assistance.  Not true!  You can plan with a professional at any time and the sooner the better.

Another myth is that you must be destitute at the time you apply for Medicaid, causing people to believe that they must give everything away before they can apply for government assistance.  However, if you visit an experienced Elder Law attorney to help you with your application, then you can still receive government assistance even if you have property.

Clients also come to us believing that Medicaid will take their house if they go on Medicaid.  If you do not seek the advice of a professional Elder Law attorney, then there is a chance that the state will take your home upon your death. With good representation, however, this should not happen in most circumstances. At our law firm, we can protect your assets regardless of whether you apply for Medicaid. However, if the family waits until the Medicaid recipient’s death to seek professional help, it is too late.

Many people mistakenly think that seeing a professional Elder Law attorney is not worth the time or money. What they don’t know is that paying for long-term care can cost between $3,000-7,000 a month. Seeking the advice of a professional saves you money by helping you protect your assets and obtain government assistance quickly. Otherwise, you lose money every month that you delay, as there could be a program available to assist you.  For example, if you are eligible for a Veterans pension and fail to seek the advice of a VA Accredited Advisor (such as our attorneys), then you are losing tax-free money every month that you don’t apply.

Finally, the biggest mistake that people make is procrastinating about having their planning reviewed by an experienced Elder Law attorney. As we age, we need different kinds of documents than we did when we were younger.  Now it is time to review your documents and make sure that your assets are protected for when the time comes.

If you need your documents reviewed or think that you may qualify for Special Assistance, Medicaid, or Veterans Benefits, consider W.G. Alexander & Associates – we offer a unique blend of asset protection, Elder Law and estate planning.  You can also attend our free seminars or call us at (919) 256-7000.

Attorney Bill Alexander discusses these issues and more every Tuesday morning on W.G. Alexander & Associates’ radio program, “Asset Protection Today,” on TalkRadio 850 WPTK (AM). Be sure to listen tomorrow  from 9:00-10:00 AM.  To listen to last week’s show, please visit WPTF’s on demand show blog by clicking here.