False Facts Friday Issue 1: If I Don’t Protect My Money, the State Will Take It

By: Joan Reed Wilson, Esq.

Welcome to this edition of FALSE FACTS FRIDAY. In my twenty years of practicing law, I have heard some very incorrect and inaccurate information, which many people believe to be true, sometimes to their detriment. With this periodic blog, I hope to spread the truth.

FALSE FACT Vol. 1, Issue 1:   If I don’t protect my money, the State will take it.

This is probably the most common “inaccurate” statement that I hear in my elder law practice. We do help clients protect their assets, but not because the State will take them if you don’t protect them.

The State does not take away your assets if you do not protect them, but you are expected to pay for your own long-term care needs.

Just as with most expenses, when you need care (such as an aide at home or a skilled nursing facility), if you own assets, then you are expected to use those assets to pay for your needs. In addition, if you are married, your assets (whether in your name or in your spouse’s) are considered owned 50/50 by you and your spouse, and the State expects you to use your assets for your spouse’s needs as well. Currently, in our area, the cost of 24/7 home care is about $225/day and the cost of skilled nursing facilities is about $400/day.

If you do not have assets in your name and control or you spend all of your assets, then you can apply to the State to help pay for your care needs at home or in a skilled nursing facility. This is sometimes referred to as Title 19 or Medicaid. When you apply to the State to obtain benefits for these types of long-term care needs, the State “looks back” five years to make sure you did not just give away your assets in order to qualify for care.

Some clients choose to execute and implement a plan that transfers their assets out of their name so that the assets do not need to be spent on their own long-term care expenses. This type of a plan requires careful analysis and consideration because of the five-year look-back and also because there are risks with putting your assets into other people’s names. Your son, who may be the most responsible and upstanding person you know, might get sued because of a car accident or might get divorced. Then the assets that you put into his name could be taken in the lawsuit.

If you or someone you know is interested in protecting their assets from having to be spent on their own long-term care needs, then please be sure to see an experienced elder law attorney. And be sure to tell them that you know the State is not going to take your money, but you still want to protect it. They’ll appreciate your knowledge.

P.S. There are several items within this article, along with items related to all of our practice areas, that will be discussed in future FALSE FACTS FRIDAYs, so be on the look out for the next one!

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