Your dad has worked hard all of his life. He’s never sat down and considered his assets and what would happen if he ran into a long-term medical condition like a stroke that could drain his finances. If he needed to go on Medicaid or ran up a lot of medical debt, would hospitals or Medicaid be able to seize his home to pay it off?
This is an important conversation to have with an elder law attorney. It can and has happened.
An Ohioan spent two years caring for her father in his final two years with Parkinson’s. His home was paid off and expected to go to her when he died. Instead, she got a bill saying he owed Medicaid $56,000 and a lien was going to be placed on his home. Asset protection is essential as your dad ages.
What Happens With Asset Protection?
Asset protection can help protect against situations like that, but it also helps protect assets from other claims. If your dad gained a lot of wealth after decades of working in a high-paying industry, he may want to protect them from claims, lawsuits, or liens.
There are different ways asset protection can work. Your dad might want to set up an irrevocable trust to protect some assets and still allow your dad to qualify for Medicaid if he needs to go into assisted living following a stroke or with a chronic condition like Alzheimer’s disease.
Asset protection is something you need to talk to an elder law specialist about as something like a Medicaid application has a lookback period of five years. That means five years of your dad’s finances will be scrutinized and if he doesn’t take protective measures until it’s too late, he won’t qualify for Medicaid as quickly as he might need it to help cover his care needs.
Another reason to consider asset protection is that it can help protect your heirs from some of the tax burden. If your dad has a number of stocks that are currently worth $10,000, but when they pass to his heir, they’re worth $15,000. The capital gains on those stocks are $5,000 and could be taxed. Asset protection helps avoid this unexpected tax bill.
How Do You Get Started?
Draw up a list of your dad’s assets. His home, valuables, and bank accounts all need to be protected. Don’t overlook anything. Once you have a comprehensive list, call an attorney specializing in asset protection.
Work with an elder law practice to make sure your dad’s assets are protected properly. Instead of relying on forms he finds online, work with an attorney to ensure he protects his wealth following state laws. Call an elder law firm to make an appointment.
If you or a loved one need assistance with Elder Law in Centerpoint, AL contact The Alabama Elder Care Law Firm, LLC today. (205) 390-0101