To many people, estate planning simply involves deciding who gets to keep their property when they die. However, your estate plan can also protect you if you have a medical emergency and address potential future financial or medical issues.
For example, you can plan ahead to protect your most significant assets if your health declines when you get older. If you don’t engage in asset protection planning, there is a chance that health issues later in life could consume every asset you had hoped to leave for your spouse or your children.
Either issue below could result in you leaving nothing behind for the people you love.
You require Medicaid benefits as you age
If you need to go into a nursing home or require intensive rehabilitation services, Medicaid will better protect you than Medicare will. However, even if you can qualify for Medicaid now, the consequences for your loved ones could be significant.
Medicaid estate recovery programs allow Medicaid to seek repayment for all the benefits they paid on behalf of a Medicaid recipient. Even the house where you live could be vulnerable to claims by Medicaid after your death.
You accrue medical debt because of inadequate insurance
Maybe you won’t qualify for Medicaid because you have too many other assets. In that situation, you may start to steadily accrue medical debts for treatment or even residential care.
While you are still alive, medical creditors could file a lawsuit against you to claim your personal assets or even place a lien on your house. They can take similar steps by making a claim against your estate after you die.
Asset protection planning helps ensure that neither Medicaid nor private creditors can seize the assets that you want to leave for your family. Recognizing what might reduce your legacy can help you make the best decisions about preserving your assets as you age.