Top Five Asset Protection Myths & Mistakes
Top 5 Asset Protection Myths That Can Cost Your Family a Fortune
When it comes to planning for long-term care, misinformation is rampant. Families often come to our office with a set of beliefs about Medicaid and other benefits that, if acted upon, can have disastrous consequences. Below, we debunk five of the most common and costly asset protection myths to help you make better choices for your family’s future.
Myth #1: “I have too much money to qualify for benefits.” (Or, “I have to be poor to qualify.”)
This is the most frequent myth we hear. The truth is, programs like Medicaid for nursing home care are designed for middle-class families. While the rules are complex, with proper legal guidance, most families can protect a significant portion of their life savings and still qualify for assistance. Conversely, simply giving away your assets to become “poor” is a dangerous strategy. Some programs, like Special Assistance for assisted living, have strict income caps. Your Social Security income alone could make you ineligible, even if you have no assets.
Myth #2: “It’s too late to plan if my loved one is already in a facility.”
This is absolutely not true. Many families believe their only option is to privately pay for care until their savings are completely gone. In reality, you can engage in crisis planning at any time. While planning in advance provides more options, an experienced elder law attorney can still help you protect a substantial portion of your remaining assets, even after a loved one has moved into a nursing home or assisted living facility. The sooner you seek advice, the more you can save.
Myth #3: “Medicaid will take my house.”
This is one of the biggest fears for seniors. While your home is generally an exempt asset during your lifetime, it is true that without proper planning, the state can seek reimbursement from your home after you pass away through a process called estate recovery. However, with proactive legal strategies, this is an avoidable outcome. An elder law attorney can help you implement tools and techniques to protect your home, ensuring it can be passed on to your loved ones. But this must be done during your lifetime; once you are gone, it is too late.
Myth #4: “Hiring an elder law attorney isn’t worth the cost.”
Failing to seek professional advice is often the most expensive mistake a family can make. Long-term care can cost between $5,000 and $10,000 per month. Every month you delay getting help, you are losing money that could have been protected. An experienced attorney doesn’t just draft documents; they provide a strategy that can help you access benefits like the VA Pension or Medicaid much sooner, saving your family tens or even hundreds of thousands of dollars in the long run.
Myth #5: “My old documents are probably still fine.”
The biggest mistake of all is procrastination. As we age, our planning needs change. The simple will or power of attorney you created 20 years ago is likely insufficient to handle the complexities of a long-term care crisis. A modern, robust plan to protect your assets should be reviewed every few years to ensure it is up-to-date with current laws and can achieve your goals.
Call our office at (919) 256-7000 to schedule a consultation.