It’s an uncomfortable conversation for many, yet it might just be the single most important conversation people will ever have in their lives: estate and legacy planning. Emanuel Haas and Ari Zaltz of the law firm Haas & Zaltz, LLP are there to help their clients navigate the highly complex and sensitive issues that arise when making decisions that range from long-term care to inheritance distribution.

One of the biggest concerns Haas and Zaltz work to address with their clients is the prospect of needing long-term care as they get older. In fact, they caution that not making appropriate provisions for long-term care is one of the biggest and costliest mistakes families can make, even though it is one that can be easily avoided.

Haas explained that very often an individual receives a diagnosis or experiences a trauma or other type of debilitating incident that creates the need for long-term care. If a plan is not in place, issues can crop up that make navigating this significant life change much more challenging for everyone. But when a plan for long-term care is already in place, it’s much easier for all involved to react with confidence.

“If you ask a random person who they think covers care as they get older, many people will tell you it’s their health insurance. Other people will tell you Medicare. Unfortunately, neither of those answers are true,” explained Zaltz.

“Sometimes a parent needs money and care immediately. If it’s not done properly and you don’t avail yourself of an elder law attorney, you can really get wiped out. A nursing home today is just an unbelievable amount of money,” he cautioned.

Haas and Zaltz advise clients to plan early, as young as 55, and when everyone is still well. “We try to do traditional estate planning but with an added level to make sure that our clients’ assets are protected for themselves, first and foremost, and subsequently for the next generation,” Zaltz said.

Otherwise, chaos can and will surely ensue. Not only will adult children be faced with how to provide long-term care for a parent, but also with the difficult prospect of how to pay for it. If a parent’s care is not being covered by Medicaid, the cost is nothing short of astronomical.

Many people don’t realize that a person only qualifies for Medicaid once his or her wealth has been depleted. Medicare is only available to those 65 and older (and with certain disabilities) and offers very limited benefits for long-term care.

Haas explained that when a person opts to become dependent on Medicaid for long-term care, a lien will be placed on his or her property and possibly any other assets.

“At least in New York, Medicaid cannot force a sale of a home because even if somebody is in a nursing home and will never come back, there is always an ‘intent to return home’ for that individual,” Haas said. Upon that person’s passing, however, Medicaid will recover what it spent on the decedent’s care, typically by selling the property.

Haas and Zaltz explain that in fact, Medicaid can go after any asset someone owns, but by setting up a trust, the home and any other assets placed in the trust will be protected. “Very often the home is the most valuable asset, and in some sense, creating a trust is a really straightforward way of addressing that problem,” Haas said.

Haas and Zaltz advise their clients that if they have assets in their name, which could be as simple as a home, they should place them in certain kinds of asset-protection trusts. That way, if a parent should require care as they get older, they will still immediately qualify for Medicaid and be entitled to government benefits. Upon their passing, the government won’t be able to claw back those assets which the parents may have intended to leave to their children.

A trust allows a person to say they no longer own the home and instead, the home is “owned” by a trust. Although a “trustee” is a nominal owner, it doesn’t actually belong to them, nor are they necessarily the beneficiary of the trust. In a trust, it can be stipulated that the parents maintain the right to live in the home until their passing. If the trust sells the home, possibly because the parents living in the home wish to downsize, the parents can still maintain the right to reside in any residential property owned by the trust.

It is extremely important to note, however, that the person(s) creating the trust must wait a period of 60 months from the time of the transfer in order to become eligible to receive Medicaid.

“The reality is that the seniors who transferred their home to a trust won’t even notice a difference,” Haas said. “They’ll live in a home just the way they always lived. They can move. They can sell the property and buy a different property and have the same right to live there, and nobody will know the difference. The only difference is that the asset will be protected.”

To learn more about what you can do to protect your assets for yourself and your children visit www.haaszaltz.com or email them at [email protected]. To make an appointment call 845-425-3900.