Installment 5 of 10

In Our Series:

“Long Term Care Costs for the Middle Class: 10 Steps to Asset Protection through Medicaid in Illinois, for Middle Class Seniors and Boomers”

 Why create a Blueprint (Medicaid asset protection letter) for your asset protection planning? Just like in building a home, you don’t hire a contractor to start slapping bricks together until you have decided on the number of rooms, type of rooms, location of the rooms, etc. Likewise, many are quick to suggest creating a will, trust, powers of attorney, perhaps an irrevocable trust, or an annuity, etc. This can be very costly and foolish. How can you create a plan consisting of various documents that are supposed to protect you without a design in mind? Mindlessly putting together layers of documents accomplishes nothing except large bills. Before our clients create any legal documents we suggest to them that they do a blueprint, which is in effect a Medicaid asset protection letter. In that letter we outline the following:

1. Planning strategies that can be done in preplanning mode, or crisis mode, depending on where you are in the long term care journey.
2. Planning strategies available for single individuals, or the community spouse when an ill spouse is going into a nursing home.
3. An outline of the current status of the law as it relates to Medicaid eligibility.
4. Finally, planning recommendations that are broken down into things that you must do immediately and things that you may be able to defer until later.

Below are some examples of our final recommendations in our Blueprint: Immediate Action

• Creation of powers of attorney for healthcare and powers of attorney for property. However, our powers of attorney have many more powers and are more substantial than the average power of attorney that most people have.
• Creating wills and trusts that have special needs trusts built into them for a surviving spouse or a minor or adult disabled child. This takes advantage of certain relief that Congress intentionally placed into the Medicaid laws.

Deferred Actions

• The purchase of a Medicaid compliant annuity or a Medicaid compliant promissory note.
• Our office files a Medicaid application.

Conclusion As you can see from the above, there are strategies that we rely on that result in the savings of a lot of assets for middle class seniors and boomers who are going into long-term care. However, because these measures are complicated, it makes sense to have a blueprint laid out describing them in detail using your asset and income numbers before actually engaging in these actions. We want our clients to go into strategies and solutions with eyes wide open. The only way that can be accomplished in most cases is to create blueprint that lays out all of the Medicaid asset protection planning strategies in the form of a letter that the client can study, and ask questions about. We usually resolve all of the questions the client may have at our subsequent “Design Meeting.” Make sure you look before you leap.