Attorney
When considering asset protection, you may think about lawsuits, judgments, liens, taxes, creditors, and seizures. However, how do you protect your estate and assets from medical costs and long-term care? The chances you will need long-term care are high. It is estimated that 70% of people over 65 years old will need some type of long-term care services.
Long-term care and medical expenses can total hundreds of thousands of dollars. Creditors may file claims against your estate to collect these funds. Our California estate planning lawyer discusses ways to protect your estate from potential costs and long-term care in this blog.
Paying for Long-Term Care in California
Assisted living, skilled nursing care, and personal care are costly. Typical ways individuals and families pay for long-term care include, but are not limited to:
- Direct pay from personal savings, Social Security income, financial assets, and other resources
- Veteran’s benefits
- Reverse mortgages and other lines on homes
- Medi-Cal (i.e., Medicaid)
- Medicare may pay for short-term stays in skilled nursing facilities
- Long-term care insurance policies
Paying for long-term care can exhaust a family’s finances and resources. The time to begin planning for long-term care is now. The sooner you create a comprehensive estate plan that includes long-term and incapacitation planning, the more you can protect your estate from medical costs.
How Can Estate Planning Protect My Assets From Medical Costs and Long-Term Care Costs?
Assets protection planning involves using legal strategies to protect your estate from creditors, taxes, liens, and other claims. An experienced estate planning attorney evaluates your assets and financial situation to develop a strategy using various estate planning tools to optimize asset protection.
Some tools you can use to protect your estate from bills for long-term and medical care include:
Trusts
Your attorney may discuss a variety of trusts that can be used to protect assets. The trust is a legal entity. Therefore, once you transfer your assets into the trust, the assets no longer belong to you. However, the assets may be used for your benefit.
Irrevocable Medi-Cal Trust
An irrevocable trust can help protect your assets and estate from a lien by Medi-Cal. Medi-Cal is the state’s version of Medicaid. A trust can help you qualify for Medicaid benefits while protecting your assets. However, an irrevocable trust cannot be changed, and you do not have control over your assets. Always work with an experienced estate lawyer when choosing this option.
Long-Term Care Insurance
Long-term care insurance can cover a significant portion of the cost of long-term care. However, the insurance premiums can be costly. Additionally, some insurance policies contain restrictions that severely limit when the insurance coverage applies.
Gifts and Transfers
A strategic plan for gifting and transferring assets to your heirs during your lifetime reduces the value of your estate. However, Medicaid has a lookback period, so you must be cautious about the timing of gifts and transfers.
Schedule a Consultation With a California Estate Planning Lawyer
The above strategies are just some ways to protect your estate from long-term and medical costs. Consulting an attorney to develop a comprehensive estate plan is the best way to protect your legacy. Call Horizon Elder Law & Estate Planning to schedule an appointment with one of our California estate planning lawyers.