Avoid Nursing Home Poverty & Spend Down - Jane's Story

The story below has been changed in order to protect the client's confidentiality, while retaining the truth of the details.  While the Family & Aging Law Center cannot guarantee results, we can say that the results below are typical for our office. 

Video Transcript:

Hi everybody, Attorney Nicole Wipp here with the Family & Aging Law Center.

So, today, I'd love to share with you a story about our client, Jane (*not her real name!). Jane, like so many of our clients, needed nursing home level care. Yet, her family was so scared - because they did not know what to do, just like so many people don't know what to do. They had been being told, "you HAVE to do a spend down, you have to spend down her money to $2,000 before she can receive benefits for care...she can't have two houses (which is what she had). She can only have one house! You've gotta sell one!" All of these things were being told to the...

...About Maintaining Control When It Comes To Estate Planning & Asset Protection

Listen as attorney, Nicole Wipp, discusses these three critical considerations when it comes to protecting yourself and your family.

1. The Law
2. The Issues
3. Your Options

You may also like: Last Will and Testament - The Facts

Questions? Need Help? Contact Us Today (248) 278-1511

The information in this video is not intended to be, nor should it be, construed as legal advice. It is for informational purposes only. For advice, specific to your situation, consult with a qualified attorney.

Irrevocable Pure Grantor Trusts With David Zumpano (Part 2)

Irrevocable trusts, traditionally, are estate tax planning devices. Very few Americans need estate tax planning, however – less than 2%. Why, then, would you want an irrevocable trust?

This two part series, including part one, focuses on a new type of irrevocable trust known as the irrevocable pure grantor trust.

Let's Continue...

Irrevocable pure grantor trusts are mainly used to protect assets from creditors and predators, and can be an excellent pre-planning tool for elder law attorneys and their clients.  Understanding what they are, and how they differ, from traditional irrevocable trusts is essential.

In this episode, David Zumpano, a nationally recognized expert on asset protection and elder law planning (also a CPA & attorney) discusses this irrevocable trust, who it is for, and why you may want one.

Learn how this type of trust is one of the best ways to truly keep your money “safe.”

...

Irrevocable Pure Grantor Trusts With David Zumpano (Part 1)

What is an irrevocable pure grantor trust, and why would someone want one? In this episode, David Zumpano, a nationally recognized expert on asset protection, estate planning & elder law, discusses with our attorney Nicole Wipp, this little known (although widely used) trust – what it is, why we use it, and who it is for.

In Part One You Will Learn:

• about the goal of helping a loved one to protect their autonomy
• why people end up in nursing homes (how failing to plan makes this more likely)
• why retirement isn’t necessarily what you think it is
• why we want to engage in an asset protection strategy for financial security in our later years
• what is an irrevocable pure grantor trust, and how it differs from tax trusts and revocable living trusts
• the history of trusts and what they were traditionally used for (tax trusts – the “traditional” irrevocable trust – no access, no control, no...

MEDICAID PLANNING

The Facts...

Assets in a Revocable Living Trust are not protected and must be used to pay for the costs of long term care.

If you are married, your home is exempt and cannot be taken when applying for Medicaid.  If you are single or widowed, your home is exempt up to $552,000 (2015). If you transfer your home to your children, not only will it result in immediate ineligibility for Medicaid, but it could also:

• Trigger a gift tax,
• Result in the loss of your homestead tax exemption, and,
• Result in your child’s spouse (the in-laws) inheriting your home. 

Giving your assets away means losing control. It’s not safe even if you “trust” who you give it to. If that person divorces, goes bankrupt or is sued, all of the money you transferred is at risk. There are asset protection trusts that permit you to keep 100% control of your assets without the risk of losing them if long-term care is needed.

You do not have to wait 60 months to...

What Should I Do to Plan For Long-Term Care? - See Part 1

A properly drafted “income-only” trust that gives a Trustee no discretion to distribute principal to the Grantor-Beneficiary, or to his or her spouse, is still a viable long-term care planning tool.

Therefore, a senior doing estate planning may keep the income from an irrevocable, “income only” trust for himself or herself, with the remainder distributable to specific beneficiaries, and qualify for Medicaid (once the applicable “penalty period” has expired) without the assets in the trust being considered by the Department of Human Services as available to pay for the cost of long-term care.

If the home is the only asset to protect, a deed which transfers the property upon death to your trust or your children, will protect the property and the right to Medicaid.  Consideration must also be given to the fact that if the property is sold and the grantor is in the...

What can be done to plan for long-term care, ensure that a health crisis or chronic illness will not erode an individual's security and dignity, and provide for family and loved ones?

As you may have already gathered, the answer is not simple. A careful analysis of each individual's personal and financial situation must be done to formulate the proper plan. Factors such as income from social security, pensions and investments; the nature and value of assets; age and health; family situation; and other considerations must be evaluated in order to make the right choices.

If long-term care insurance is not an option, and personal income and resources are not sufficient, one planning technique is to transfer assets into an “Asset Protection” Trust, retaining the income for the “Grantor” and preserving the principal of the assets (the assets held by the Trustee) for spouses, children or other beneficiaries. When properly drafted, the trust will provide ...

For several years, there has been a divide among the courts nationwide as to whether or not IRAs that were inherited are protected from creditors or bankruptcy.

 As of June 12, 2014, we definitively know the answer – and it isn’t an answer most of you will like.  The answer,  according to the U.S. Supreme Court in Clark v. Rameker is…NO, an inherited IRA is NOT protected from creditors  in bankruptcy.

 What are inherited IRAs?  Here, we are talking all tax-deferred assets that are transferred to another person after  death – except to a spouse.  When I say “all tax deferred assets,” I mean IRA, 401k, 403b, IRA annuities, etc.  A  spouse doesn’t fall under this category because a spouse the one person entitled to actually directly roll over the other  spouses IRA into their own (no, contrary to what you believe, your children are NOT allowed to do this!  Children must  set up...