The term “asset planning” can refer to different sets of circumstances. In this post, we will look at a couple of the ways that proper asset planning can preserve your resources.
Lawsuits
Business people can sometimes be concerned about potential legal actions. If someone were to get injured on property that you own, like a customer or a tenant, legal actions could be initiated.
Professionals can also be vulnerable to lawsuits. For example, doctors are viewed by litigious types as people who have something to take. Malpractice suits are not uncommon, and this can be a major source of concern.
With the proper asset planning, you can protect your personal property. One asset planning structure that is often utilized by business people is a limited liability company. When this type of company has been established, your personal property would be separated from the actions of your business.
Family limited partnerships also used by some people who are looking for asset protection solutions.
Long-Term Care Costs
When you think about retirement planning, before you understand all the facts, it may seem like a relatively simple equation. Along the way, you make good choices so that you can develop a nest egg and enough income to enjoy your active years doing all the things that you love to do.
As you do your calculations, you may assume that there will be a certain amount left to leave to your loved ones after you are gone. These calculations would be based on the assumption that your expenses would be more or less the same throughout your life.
All this can make sense on the surface, but there is a very big wildcard that enters the picture. The majority of senior citizens will need some form of living assistance eventually, and a significant percentage of them will ultimately reside in nursing homes.
In fact, almost one fourth of people who are at least 85 are residing in nursing homes at the present time, and the figure is 50 percent among people who are at least 95.
If you pay into the program sufficiently while you are working and paying taxes, you will qualify for Medicare when you reach the age of 65. This can lead to the belief that you are covered if you ever need nursing home care.
In reality, Medicare will not pay for a stay in a nursing home or assisted living community. The type of care that these facilities provide is considered to be custodial care, and Medicare does not cover it.
Nursing home costs are staggering, and they have been rising each and every year. Depending on your location and the particular facility that you choose, it could cost $100,000 or more to reside in a private room in a nursing home for a year. Of course, there are those who require care for number of years so we are looking at big digits.
Fortunately, there is an asset planning solution that is widely embraced. Medicaid is a government health insurance program that is administered by the federal government along with each state government. You may think of Medicaid as a health insurance program for the poor, and this is not inaccurate. It is intended for people with financial need.
How does this apply to you as a person who is going to retire with resources? The Medicaid program does pay for long-term care so you can keep your assets in the family if you can qualify for Medicaid to pay for a stay in a nursing home at the end of your life.
The limit on countable assets for Medicaid eligibility is $2000. There are however some things that do not count, and a healthy spouse is entitled to retain ownership of a certain store of property if his or her spouse were to apply for Medicaid to pay for long-term care.
It is also possible to give gifts to your loved ones before you apply, but the timing is important because there may be a penalty imposed if assets are given away shortly before the application for Medicaid is submitted.
With the proper planning, you can become Medicaid eligible without losing everything in the process, and you can potentially be financially comfortable while you are still living independently.
Asset Planning Consultation
These are a couple of things to think about, but asset planning is a multifaceted, comprehensive process. If you would like to sit down and discuss your personal situation and your long-term objectives with a licensed professional, our doors are always open.
Send us a message through our contact page or call us at (704) 944-3245 (Charlotte, NC) or (859-372-6655 (northern Kentucky) to set up an asset planning consultation.
John’s practice focuses on the use of Wills and Living Trusts in Estate Planning to help individuals protect their families and preserve their legacies after their deaths, but his practice also focuses on the critical issues of protecting individuals with dementia or other diminished capacity, assisting individuals in qualifying for Medicaid and other government benefits to offset the costs of long-term care, and providing special needs planning.
John is admitted to practice law in North Carolina, South Carolina, Kentucky, and Ohio, and he is accredited by the Department of Veterans Affairs.
- What You Need to Know about the Medicaid Look-Back Rule - January 3, 2023
- How to Pass Down Your Legacy in Your Estate Plan - October 3, 2022
- Practical Steps to Take after Receiving a Terminal Diagnosis - September 30, 2022
