On this page are examples of the outstanding results our clients have enjoyed from estate planning and from life care planning for elder family members. While these are actual cases, the names of the individuals and families involved have been changed to protect our clients’ privacy. If you are here because you don’t have a plan in place, click on the tabs below and be encouraged. These clients and their cases are not unusual. They’re normal, everyday outcomes in our planning practice. If you have an existing will or trust, but they are more than five years old, they are likely out-of-date. Let’s ensure you get the results you can find on this page for your family. Finally, if you are worried that the cost of long-term care may eat away at your life savings and leave you or your spouse destitute, click on the Richards case and the Johnsons case below. If you like what you see, click on a Get Started button to get on our calendar as soon as possible.
Jim and Sue Richards
Jim and Sue Richards, ages 78 and 72 respectively, came to us with the primary concern that, although they were currently healthy, their assets might be lost to a nursing home if either of them needed that level of care. Their assets are listed below.
| DESCRIPTION | ASSET VALUE |
| Home | $ 150,000 |
| Stocks | 250,000 |
| Savings | 152,540 |
| Car | 17,500 |
| Life Insurance | 7,500 |
| TOTAL ASSET VALUE | $ 577,040 |
Our Analysis
Analyzing the Richards’ situation, we determined that their stocks, savings, car and life insurance were all at risk to lawsuits, but the more likely risk to their savings would occur if either of them needed skilled nursing care. In that case, even their home would be at risk to loss in the state’s Medicaid estate recovery program. In that program, the state will take assets from the deceased recipient’s probate estate in order to recover some or all of the Medicaid benefits paid to that individual.
Jim and Sue had two options:
- Crisis Planning. They could wait until one of them was in immediate need of nursing care. In that case, we could save approximately half of their assets (about $275,000) using a Medicaid compliant annuity, but the assets used to purchase that annuity could be lost if one of the Richards’ died before the annuity was complete.
We recommended that they plan now, while they were still healthy. - Plan Now. If they chose to plan while they were still healthy, our Medicaid asset protection plan would immediately protect all of their assets from lawsuits. In addition, our plan reduced the risk of loss to a nursing home from $577,040 to an estimated $135,000 – thereby protecting a minimum of $442,000 from being lost to nursing home expenses. If they remained healthy for a five-year period, our plan protected 100% of the Richards’ assets, even from the government for Medicaid purposes.
In other words, after five years the Richards would be immediately qualified for Medicaid, which would cover their care in a nursing home. The assets protected under our plan could be used to provide types of care, travel, meals out or other activities that would enrich their lives, memories Medicaid would never provide.
The Solution
Our recommended plan utilized two trusts in concert:
A Revocable Trust held the Richards’ home and other assets that were exempt from lawsuits and would not be counted against them as resources under Medicaid rules. This trust removed those assets from the Richards’ probate estate, because the trust will distribute these assets to their children outside of the probate system. The Richards were out of the probate system for good. No probate of a Will, and in the event either of them is disabled later in life, they will not need a guardian.
We utilized an irrevocable Medicaid Asset Protection Trust to protect assets that were at risk of loss to lawsuits and would be considered resources for Medicaid purposes. The Richards continue to enjoy all of the income generated by the assets sheltered in this trust. In five years, the assets transferred to this trust will no longer be countable resources under Medicaid rules.
We also recommended the Richards consider some sort of long-term care insurance policy, eliminating the risk to the $135,000 in assets during the five year “look-back” period from date their asset protection trust was funded.
As is usually the case, the most efficient way to maximize the greatest asset protection possible for the Richards was to plan right away, before either of them needed to apply for benefits.
For their part, the Richards were thrilled that a relatively small financial investment in planning now protected a minimum of $442,000 from being lost in the future. In addition, we were able to free the Richards and their children from the probate legal system. To probate two Wills would have cost the Richards as much as $10,000, which more than offset the investment in their asset protection plan. If either of the Richards had needed a guardian to manage their estate, without the use of trusts their property was at risk to being managed under a probate court-supervised guardianship. Eliminating that risk protected an additional $20,000 or more of the Richards’ assets from exposure to attorney’s fees and court costs associated with a guardianship case.
The Bottom Line
The Richards realized up to $600,000 in asset and probate cost savings, all for the price of about a month in nursing care.
Tim and Sarah Johnson
Tim and Sarah Johnson, ages 60 and 58 respectively, were concerned about protecting the portfolio of residential real estate they had acquired during their marriage. They were counting on these properties to provide significant income during their retirement, which they planned for two years from the date we began their planning. The Johnsons informed us clearly that they had one primary objective, and that was asset protection.
The Johnsons’ Assets
| Home | $ 350,000 |
| Investment Real Estate | 1,200,000 |
| Business | 250,000 |
| Savings | 30,000 |
| Household Furnishings | 45,000 |
| Life Insurance | 730,000 |
| Cars, Trucks, Boats, & RV’s | 125,000 |
| TOTAL ASSET VALUE | $ 2,730,000 |
Our Analysis
An asset protection plan made sense to the Johnsons, because they did not want any of their rental properties to be lost to a lawsuit. In fact, they wanted us to do everything in our power to create layers of defense and the most inhospitable target possible to plaintiffs’ lawyers. The Johnsons were ecstatic to learn that in addition to the immediate protection of their assets from litigation, in five years their assets would also be protected in the event either of them needed assistance from Medicaid to cover the cost of long-term nursing care.
The Solution
We created an enhanced Asset Protection Plan for Tim and Sarah. The first was a Revocable Trust to hold their home, two vehicles, household furnishings, and their savings. In the revocable trust, the Johnsons enhanced their complete control over the assets that were exempt from lawsuits and from Medicaid. They avoided probate and the $10,000 to $15,000 in probate costs we estimated they would face.
We also created a Medicaid Asset Protection Trust (MAPT), which was designed to hold their assets that were at risk, both from litigation and for purposes of Medicaid qualification. Their business, investment real estate, and other motorized vehicles and equipment, were placed into their asset protection trust. Inside the MAPT, we also created a Series LLC, which would contain a parent LLC and eight subsidiary (series) LLC. Each series LLC held title to a particular residential rental property.
As an added bonus, in five years all of the assets transferred to the asset protection trust will be protected even from being considered for Medicaid qualification purposes.
The Bottom Line
In exchange for a financial investment the equivalent of about a month or two in nursing home care, the Johnsons were thrilled that they were protecting a total of $2.7 million in assets from litigation and, ultimately, from the government as well.
At their signing meeting, a smiling Sarah said,
“If I could invest (a few thousand dollars) and know it would be worth $2.7 million in five years, I would write that check every day!”
Rob and Laura Tyler
When Rob first contacted us, he was stressed beyond belief. HIs wife of more than 20 years, Laura, was suffering in the end stages of ALS, also known as Lou Gehrig Disease. She was hospitalized and the Tyler’s insurance company was insisting that she be discharged to a skilled nursing facility that possessed the capacity to deal with ALS patients.
At home were the couple’s two teenage sons. Rob didn’t know where to begin, but he knew he needed to act fast. A plan had to be in place within 30 days, the deadline set by their health insurance carrier.
Our Analysis
When we received Rob’s asset list our attention quickly turned to the Medicaid rules that are designed to prevent impoverishing a healthy spouse. Every well spouse is entitled to have a certain value in assets at his or her disposal. This maximum amount is called the “Community Spouse Resource Allowance (CSRA)”.
In other words, a healthy spouse (like Rob) was entitled to keep more assets , even if the ownership of those assets had to be transferred from the spouse in need. Transfers from one spouse to the other are penalty-free under Medicaid rules. The CSRA value for 2021 was $130,380.00 in total assets that could be held in Rob’s name without counting as resources against Laura.
Here Were the Tylers’ Assets:
| Description | Asset Value |
| Homestead Real Estate | $ 102,950 |
| Vacant Lot | 5,000 |
| Cash | 1,950 |
| Savings | 60,000 |
| Retirement (Rob’s) | 75,000 |
| Two vehicles | 33,000 |
| TOTAL VALUE | $ 277,900 |
| Less the Adjustment for the CSRA | (130,380) |
| EXCESS ASSETS PRIOR TO PLANNING | $ 147,520 |
The Solution
First, we were able to eliminate the value of certain assets that, under the rules governing a community spouse’s resources, Rob benefitted from the following:
- The couple’s home did not count toward the CSRA
- Neither did their vehicles count
- The vacant lot could be placed on the market and, whether it sold or not, would not count as a resource
Removing those assets from the CSRA calculations, and deducting his attorney’s fees, left Rob with a countable CSRA assets valued at approximately $ 128,500, just under the allowable limit.
The Bottom Line
Laura was qualified to apply for Medicaid, and Rob was left in charge of $272,900 in assets without losing a single thing he and Laura wanted to keep. In addition, their assets were removed from the probate system, an additional savings of at least $10,000 and, if Laura would have needed a guardian (in the event of Rob’s death), additional savings of $30,000 or more.
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