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5 Asset Protection Strategies that Solve Real-Life Challenges

Everyone has a dreaded task or two they are tempted to put off until the last minute, whether it’s replacing a burned-out light bulb, submitting a performance review or preparing your last will and testament. For this reason and others, an individual may not feel the urgency to meet with an estate planning attorney until they (or their loved one) are facing an imminent health or financial crisis. There’s no time like the present to start perfecting your long-term plans.

Asset Protection is a strategy elder law attorneys use to help clients preserve their funds from lawsuits, taxes, creditors and other potential threats. This strategy can also help “stretch” the funds an individual may need to pay for long-term care later in life, and may also provide access to public benefits, such as Medicaid. Not sure how these scenarios play out in the real world?

Below are several real-life experiences that show how Asset Protection strategies can help provide a solution to even the most serious challenges. Meeting with an experienced estate planning and elder law attorney is an essential first step to finding the best solution for you!

How Does an Asset Protection Strategy Work?

Scenario #1: Preventing family conflict over how your assets are distributed.

Let’s say you are planning to leave a distribution of assets for your children upon your death. You may be concerned about the possibility of opinionated or outspoken relatives creating tension after you are gone — or perhaps contesting those legal documents, if one child is receiving a smaller inheritance than the others, for example.

Solution: In this scenario, an experienced attorney may recommend placing your assets into a Living Trust which is either “revocable” or “irrevocable.” This means the trust will begin working as soon as its legal documents are signed.

It is also highly likely the attorney will stress the importance of selecting an agent or agents under your Power of Attorney for Financial Matters. This person will be responsible for carrying out your wishes if you ever become disabled or incapacitated. Your agent should be trustworthy, knowledgeable in finance and unafraid to stand up for your wishes, even in the face of opposition from family members.

Scenario #2: Preserving public benefits for a loved one with special needs.

You may have a minor or adult child with special needs who will need assistance for the rest of their life. Your child may be receiving government benefits for social services which have very strict financial guidelines. You do not want to do anything that would jeopardize those benefits.

Solution: An estate planning attorney can explain the benefits of creating a Special Needs Trust, which will be managed by a trustee or trustees of your choosing after you pass away. Then, the trust can be named as the beneficiary for your child rather than having them inherit your estate outright. Read more about how to select a trustee.

Scenario #3: Affording the cost of long-term care without depleting your savings.

For a senior adult with a chronic health condition, such as diabetes or Alzheimer’s disease, the need for future long-term care might be certain. After working hard and saving money your entire life, you may be interested in finding a way to preserve some assets for your children while ensuring you can afford the cost of long-term care.

Solution: Everyone needs to make a plan for their future financial well-being, and even more so when a chronic health condition is present. As a general guideline, if your need for long-term care is at least five years down the road, an experienced attorney may advise putting your assets into an irrevocable trust to protect them from Medicaid spenddown.

If you or your spouse was a Veteran during wartime, Veterans Benefits may also help pay expenses for skilled nursing. Our partner attorneys are accredited by the U.S. Department of Veterans Affairs and have proven expertise with VA benefits programs.

Scenario #4: Funding a nursing home or other long-term care.

A serious health crisis can occur to anyone at any time. When the unthinkable happens, you or a loved one may need to move into a skilled nursing facility. Perhaps this could occur when you do not have an irrevocable trust in place. You do not want your spouse to become impoverished while your savings go towards nursing home expenses.

Solution: In the unfortunate event of a loved one’s health crisis, their spouse and/or Power of Attorney for Financial Matters should immediately visit with an elder law attorney. The attorney can complete a Declaration and Assessment of assets belonging to you and your spouse to determine the amount of assets the spouse remaining at home can keep — while ideally allowing the spouse in a nursing home to become eligible for Medicaid. Again, Veterans Benefits can also help pay for long term care expenses for an eligible recipient.

Scenario #5: Leaving an inheritance for your loved ones and for charitable causes.

A person with a nice nest egg may also have a sizeable tax bill each year. This presents two likely goals: 1) To provide an inheritance for loved ones that will be protected from bill collectors, bankruptcy and divorce court; and 2) To minimize annual taxes.

Solution: Meet with an estate planning attorney to discuss different trust options, such as a Heritage Trust for children and grandchildren, or a Charitable Remainder Trust for a cause you are passionate about. When applicable, a trust can generate tax credits that help offset your income taxes.

The Beck & Lenox Law Office Provides Expert Advice for Important Decisions

There are so many challenges and life scenarios that can be resolved with an Asset Protection strategy — and the first step is seeking expert legal advice to navigate your particular scenario. The attorneys at Beck & Lenox Estate Planning & Elder Law in St. Charles are here to help bring peace of mind to you and your loved ones.

Our attorneys offer a free consultation to individuals or families in need of our legal services. Upon scheduling this appointment, you will be asked to complete a questionnaire that provides a description of your needs and basic financial information. This information will be used to help decide what Asset Protection strategies could best achieve your goals.

To schedule your free in-person or virtual consultation today, submit a request online or call our office at (636) 946-7899.


This article is not intended as a substitute for the legal advice of an attorney. Readers should consult with an attorney for matters concerning their estate and estate planning documents.