There are several strategies for protecting your assets from the immense cost of long-term care in the State of New Jersey, and the one that’s right for you will depend on your unique situation. Putting careful thought into this concern ahead of time is critical to protecting your assets in the future, and our experienced New Jersey elder law attorneys at Rice & Quattrone, PC, are standing by to help.
Key Considerations
It’s important to keep key considerations in mind when taking steps to protect your assets in the context of long-term healthcare needs.
5-Year Look-back Period
In New Jersey, Medicaid employs a strict 5-year, or 60-month, look-back period. This means the state will carefully review all your financial transactions, including gifts and the transfer of property, during the five years prior to your application date. Any improper activity within this time frame can trigger ineligibility or a financial penalty.
Crisis Planning
If you haven’t implemented any plans in relation to long-term care in advance, there may still be opportunities for crisis planning. While you’re likely to have fewer options, a trusted elder law lawyer can help.
Primary Asset Protection Strategies
There are several primary asset protection strategies that help many people protect their assets in the event they require long-term care in the future.
Medicaid Asset Protection Trusts
A Medicaid Asset Protection Trust (MAPT) allows you to transfer your home or savings into an irrevocable trust. This means the assets in question will no longer be included in your personal estate. For a MAPT to protect the assets included, it must be set up and funded before the five-year look-back period begins.
Medicaid-Compliant Annuities
If you’re married, you have the option of converting a sum of cash into a Medicaid-compliant annuity (MCA) that can serve as an income stream for your spouse who doesn’t currently require long-term care. When structured correctly, this form of annuity can safeguard your assets while allowing you to meet Medicaid eligibility requirements. And this applies even if the MCA was created during the look-back period.
Exempt Asset Spend-Down
The law allows you to spend assets that generally wouldn’t be exempt in terms of Medicaid eligibility on specific items that will not count against your limit. These include:
- Making modifications to your home
- Paying off legitimate debts
- Buying a reliable vehicle
- Purchasing a burial plot
Caregiver Agreements
You may also be able to pay a family member to provide you with caregiving services if formal procedures are followed before payment is made for the caregiving services. In this way, you legally transfer funds to your loved one in the form of purchasing services rather than giving them the money as a gift. However, the payments will be income taxable to the care provider.
Discuss Your Concerns with Our Experienced New Jersey Elder Law Lawyers
Our dedicated New Jersey elder law attorneys at Rice & Quattrone, PC, dedicate our impressive practice to helping our valued clients protect their assets, including in relation to the need for long-term care. For more information about what we can do to help you, please don’t delay [contacting us online or giving our firm a call at 856-673-0048 today.