Far too often, aging New York residents reach what are supposed to be the golden years only to find themselves instead facing the need for long-term care that is prohibitively expensive. Since few have the necessary cash readily available to pay the high cost of this care, they are then expected to sell off the assets for which they have worked their entire lives to earn. While there are various methods of asset protection, they all require planning years in advance, so it may be wise to begin exploring these options with an attorney now, rather than waiting until it’s too late.
Long-term care for the elderly continues to increase at an alarming rate, with an estimated cost in 2015 of up to $265,000. Few individuals have such funds easily accessible. Yet a study found that an estimated 50 percent of individuals over the age of 65 will need health care assistance as they age.
The option for many, then, becomes liquidating their hard-earned assets. Once an individual has sold off and used up enough assets to fall below the acceptable Medicaid threshold, he or she may then be in a position to qualify for assistance. This, however, means they are left with no more than $2,000, one car and their home, if that.
It is because of this dire reality that many families have begun turning to asset protection planning. A New York estate planning lawyer can offer guidance throughout the process, such as helping the client establish an irrevocable trust. This type of trust can help ensure that, within two years, assets within the trust cannot be sold to satisfy creditors; even better, after five years, the assets can no longer be counted against Medicaid disqualifications. However, because these methods of asset protection take several years before they are fully effective, it is wise to begin the planning process as soon as possible.
Source: recordcourier.com, “Understanding asset protection planning“, Cassandra G. Jones, June 3, 2017