A Shift in Elder Law and Other Planning- Planning for the Long Term “Decumulation” of Assets for Nursing Home Care and the Reason to Plan Sooner for the Protection of Assets and for Peace of Mind.
For months now our colleagues have received our suggestions regarding various opportunities and pitfalls in the Deficit Reduction Act of 2005 (ADRA@). The DRA will continue to impact our clients, many of whom are often are consumers of public benefit programs- especially with regard to qualification for MEDICAID for long term nursing home stays when long term care insurance is not an option.
While many advisors are intimidated by the changes found in the new law, many other advisors are seeing the opportunities, embracing the change, and using it to the advantage of clients. With this in mind, I would like to respectfully suggest to you a new shift in thinking that is required for planning now and in the future. It goes like this:
Advisors have been helping their clients for years with the arrangement of their affairs so that assets will pass in the proper manner and to the proper heirs upon the client’s death. The question that was being asked by clients at that time was, “What happens with my assets when I die?”
I suggest to you that the DRA requires advisors and clients to ask a new question. That is:
What happens if I don’t die, but rather I become ill and live for a very long time?
The answer to this last question is substantially different. Good planning for clients must consider both scenarios: death planning certainly, but also long term care asset planning. Such long term care asset planning cannot be done exclusively in crisis mode as it used to be done. Since the DRA was passed, this planning must take place years in advance (at least five years, but preferably more than five).
Advisors will now start to think about this additional perspective and the shift in approach that is going to be required in order to serve clients into the post-DRA future.
Please see our website for updates in this area at abferrarolaw.com.
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