Protecting Assets while Qualifying for Government Benefits

by David Goldfarb

As you age, you may require an increasing amount of medical care—including home health care or a move to a skilled nursing facility or another type of long-term care facility. Such care can cost a lot of money, so seniors understandably want to qualify for as many government benefits as possible.

To be eligible for ( Medicaid and other government benefits, you must demonstrate that you are indigent and do not have the means to pay for the care yourself. However, another important goal for many seniors preserving some assets for their later years or passing on assets and property in their estates to needy beneficiaries. If you own assets, however, covering your medical care can quickly deplete them without government assistance. This is a common and complicated situation for many seniors in New York today.

In addition, if you have a child or another beneficiary with special needs to whom you plan to leave assets, such assets may disqualify them from receiving the government benefits they need to cover their care. Fortunately, you can protect your assets while also qualifying for government benefits for either yourself or a beneficiary with special needs. This is not a simple task, however, and you need the advice and assistance of a lawyer who is familiar with this type of future planning strategy.

Tools for Asset Protection

The best specific strategy to use to protect your assets will depend on the specifics of your situation. Considered many factors, including how far in advance you are planning, the age of the person needing care and benefits, and much more. You may need to use one or more methods of asset protection—and an experienced estate planning attorney can design the best strategy for you.

Tools you may use to achieve this particular goal include:

  • Gifting assets to family members
  • Annuity purchases
  • Certain long-term care insurance policies
  • Third party trusts, such as a supplemental needs trust
  • First party trusts, including a special needs trust or a pooled trust.

Each of these has certain limitations when it comes to ensuring Medicaid or Medicare eligibility. For example, any gifts made within five years of applying for Medicaid nursing home services may penalize your application and benefit eligibility. In addition, first party supplemental needs trusts are generally only available for disabled individuals younger than 65. After that age, you would need to explore a different type of trust to protect your assets.

A New York Medicaid Planning Law Firm Can Assist You

At Goldfarb Abrandt & Salzman LLP, our planning lawyers can evaluate your situation in relation to the income, asset, and equity restrictions for eligibility for government benefits. We can devise a strategy to protect your assets and ensure you receive the care you need without depleting your estate. Asset protection is only one of many estate and special needs planning services we provide. If you want to further discuss how we can help you, call our office at (212) 387-8400 or contact us online today.