After spending your life working for your assets, it's understandable that you’d want to protect them from going to the government or being spent on a nursing home stay in your later years. Many people wonder if the best way to protect assets is to keep them in the family by directly giving money, homes, or cars to a spouse or child.
Yes, in some cases, you can protect assets by giving them to a loved one. In many others, however, this practice actually causes more problems than it solves.
Why Gifting Assets Isn't the Best Route to Take
Taxes are an issue to consider when gifting expensive assets, and the $15,000 per-person threshold before having to report gifts to the IRS should be kept in mind. That isn’t the biggest problem standing in the way of gifting, however, as it is even more important to understand the Medicaid five-year look-back rule.
It is crucial to plan ahead in this regard in case you end up needing Medicaid to help cover the cost of a nursing home stay. When you apply for Medicaid to help with nursing home costs, the government looks back at any assets you gifted for a full five previous years and uses those gift amounts to delay your benefits.
Even if you never need Medicaid, gifting may still not be the right way to go. When you gift money, real estate, or other possessions, you lose control of those assets and have no say in how they are utilized going forward. Your hard-earned assets might be:
- Used in a way you don’t approve of
- Sold outside of the family without your permission
- Completely lost to creditors
What to Do Instead of Gifting Assets
It is often better to put assets in a trust instead of gifting. The trust can be overseen by an administrator who has your wishes and best interests in mind. To set up a trust and ensure its properly funded and administered, contact an asset protection attorney to discuss your options and find which route is best for keeping your money and property safe.
Here’s where we specifically beat out the competition. Even if you already gifted assets to a family member, we have ways of reversing those gifts and using patented trusts to overcome Medicaid look-back problems.
Let Our Asset Protection Team Find the Right Solution for You
You shouldn’t have to worry about losing your assets as you get older, as we can use some outside-the-box legal solutions to help you and your spouse can keep everything without spending down assets to qualify for Medicaid. Set up a consultation and we can get started protecting what you’ve worked so hard to earn.