This is the first of several case studies designed to give examples of how Massachusetts elder law attorneys protect assets.

Sometimes, our asset protection lawyers work with families where one parent has died and the surviving parent is entering a nursing home.  Mr. Davis is a typical case.   Mr. Davis is 88 and suffered a severe stroke. He had been living independently at home, but the stroke has severely impacted his ability to care for himself and he will need nursing home care for the rest of his life.  He is worried about losing his life save savings.  Even more importantly, he wants to protect his house from MassHealth lien.  Mr. Davis’s house is worth approximately $500,000 and has savings of $450,000.  He receives a monthly pension and Social Security totaling $3,000.   His children want to be sure that he receives excellent care for the rest of his life.  If possible, they would like to protect a portion of the assets from Mr. Davis’s long-term care costs.  What kind of planning is available even at the last minute?

One way to protect a portion of Mr. Davis’s assets would be to create and fund an irrevocable Medicaid Asset Protection Trust.   A properly drafted irrevocable trust can protect assets from a MassHealth lien.   However, it is important to remember that if you give away assets either to family members or into an irrevocable trust you are making yourself ineligible for Medicaid benefits for up to five years.   If Mr. Davis transfers his house into an asset protection trust he will have to pay privately for his care for the next five years.  However, Mr. Davis can use his remaining savings and his income to cover these care costs. After the five year ineligibility period has expired he can then apply for nursing home MassHealth benefits.  His house will be protected from his care costs, and pass at his death to his heirs.

What are the outcomes of the family seeking our advice?

• Mr. Davis ensured his entry into a good nursing home by showing the facility he had the financial ability to pay privately for several years.

•  We protected a house worth $500,000 and any future appreciation as an inheritance for the children.

• As trustees, the children are renting the house, using the rent to pay the monthly real estate taxes and insurance and paying the remaining income to their father who uses the income to help defray the cost of his private care.

This case had a successful conclusion because the family chose to work with attorneys who specialize in asset protection.  They saw the value in expert advice which resulted in obtaining the best possible care for their father while honoring his wish of providing a legacy for his children.

Regards,

Eric R. Oalican