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As I watched my mother exhaust her modest savings while in assisted living and nursing home, I realized how quickly assets can vanish. What is the recommended procedure for a person of my age, 62, to manage assets so that they can be left to my children? I suppose that a trust needs to be implemented and perhaps long-term care insurance should be considered.

If you know of an informed, trustworthy person to turn to for such advice, I would appreciate the name.
 

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I would avoid financial advisers and seek out an elder care attorney if your fear is spending your life's savings on assisted living and nursing homes rather than passing the assets to the next generation.
 

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Elder Care attorneys were once able to do a lot in this arena, but have been dramatically limited in whats possible due to the Deficit Reduction Act of '05. I work with Long Term Care Insurance every day and would strongly suggest you be very cautious going this direction. The DRA did give us something called Long Term Care Partnership and allows an individual to purchase a "partnership" policy which will (in the most basic sense) protect a set amount of an individual's wealth.

Perry signed the laws enabling this legislation to go through about 3 months ago, but we're (Texans) are currently waiting Health & Human Services to approve the changes in Medicaid laws.

PM me for more info.



DJ
 

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I work with International Wealth Management, and I would reccommend finding an advisor in your area. Long Term Care insurance, estate planning, and overall asset management would be well worth your time.
 

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I asked my girl, (she is an assisted living director for a local nursing home and has been a CFO for a nursing home). Alot of people think they can just sign over all their wealth (no matter how modest) to a family member and then go into a long term care or assisted living place and then not have thier assets compromised, this is not true, a nursing home or assisted living facility has 3-5 years of records they can dig through and draw off of no matter where they went. She said she would do some more research but she told me that there is not much you can hide from them when it comes to "financing" your nursing home or assisted living state. They can't take from the estate that has been "hidden" or "transfered" to a family member, but you can't stay there under state pay or medicade with those type of records, you would be what they call "private pay" status. I'll elaborate further when she gives me more details but if you have any other questions I will run them by her if you need help, just PM me.
 

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I think you can transfer your assets to a trust or some other person, but it has to be done 3 years before you can use medicade. You need to ask a probate and estate attorney about this.
 

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The Deficit Reduction Act of 2005 increased the look back period from from 3 to 5 years and impacts transfers made after February 8 2006. You also must disclose any annuities which will need to name the state as beneficiary for the amount of Medicaid assistance the state provides to the annuitant. In the past home equity was not considered when determining Medicaid eligibility. Now if you have equity in your home over 500k get ready to move or not qualify for Medicaid.

The reason for Medicaid in the first place was to provide care to the indigent. Health & Human Services & the individual states realize the impact of people with assets artifically qualifying was staggering. This is why DRA 05 went through so easily. DRA made it much more difficult to have access to these programs if you have any wealth.

It wasn't a "complete take away" situation though. As a replacement to making things much more difficult, they gave us LTC Partnership Expansion (as I mentioned earlier). I work with this stuff on a daily basis and would be more then happy to help anyone with any specific questions. Please PM me with questions.

DJ
 

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Sharkbite, can you go into more detail on this plan...... LTC Partnership Expansion
 

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Partnership Expansion was allowed as a 'take away' when the medicaid laws changed. The basics behind it are that if you purchase a partnership eligible Long Term Care insurance policy you'll receive some asset protection from medicaid spend down. In essence they are "partnering" with you to pay for potential LTC costs in the future. The government allows you to shelter, dollar for dollar, the amount you've received from a LTC insurance policy if you run spend through your whole policy.

As an example, let's take an individual with a 250k nest egg that is diagnosed with Alzheimers. If that person doesnt have LTC insurance they'd have to spend down their own assets until they were almost financially wiped out, then they'd be eligible for Medicaid. If you had a hypothetical $240k LTC policy (not partnership), he would have to use the policy and if it ran out, would have to spend the majority of his $250k, then be eligible for Medicaid. With a LTC partnership policy, if he ran through 240k policy he would receive 240k worth of protection and would only need to spend 10k of his assets before becoming eligible for medicaid. This would leave the "protected" $240 for his family, church, charity, Texas A&M University, etc.

That's really a high level run through for you. As I mentioned earlier, it's still not available in TX yet (FL went live last week, VA is next month) but will be soon. If you need a deeper dive into any of this feel free to PM me.

DJ
 
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