Asset Protection For Elders

When it comes to protecting the estate of senior citizens, it’s important to plan ahead and understand the complexities that surround this issue. Because the rules about this are constantly fluctuating, it’s advised that an accountant or an attorney be contacted before any policies are finalized.

The extremely high costs of nursing home residency means that most elders qualify for Medicaid assistance. However, in order to meet the required program rules, nursing home residents must decrease their financial resources. This means disposing of investments, bonds, real estate, etc. Because these assets are quite valuable and meaningful, many seniors will transfer these assets to family members as a way to protect and preserve them.

Transferring these assets is not as easy as it seems. States are legally obliged to withhold Medicaid payments to individuals who “sell down” their assets for less than their market value within 5 years of applying for benefits. This encourages seniors to plan in advance, creating many options for their estate.

Most elders opt to give away their funds to family members and then wait out the five- year look back period. For this to work, the elder must retain adequate capital to be able to pay privately for care through the five-year look-back period. Some good strategies to follow include:

Take Inventory of All Property

This includes bank accounts, bonds, annuities, properties, stocks, and vehicles. Because Medicaid will limit the amount of assets that can be owned, it’s critical that one be careful to avoid any fraudulent transfer of these items. This means never selling these assets below their fair market value within the five-year look-back period.

Confirm the Assets Allowed

Medicaid policies differ from state to state. It’s essential that the local Medicaid office be contacted to ascertain which assets are covered. For instance, most insurance companies will allow a home to be kept if it is the primary residence. Vehicles are also considered safe as long as it’s used for transportation.


Since the home and vehicle will not be touched, it’s recommended that money be spent on these remaining assets. Paying off the mortgage or hiring a contractor to renovate the home are all great ways to increase the value of the home while also spending the other assets.

Rearrange the Assets

Transfer assets to an immutable trust fund. By doing this, the assets are no longer owned and no one else can affect them. Doing this will also eliminate probate and decrease estate taxes.

Introduce a Caregiver Agreement With a Relative

Using assets as compensation for a service to family members is perfectly legal. A written agreement is a must when executing this type of endeavor.

Understand Spousal Rights

Assets that are not immune will be added and divided in half. A prenuptial agreement is not valid when it comes to dividing assets. The spouse may keep his/her burial reserve, automobile, and other personal items.

Remember not to attempt any of these strategies without the assistance of an accountant or lawyer. Look for those with experience in elder law so that they can help you find the best option for the individual and their family.

Elliott Moore has been employed for over 20 years as a financial advisor for many clients as well as for privately owned businesses. His background in financial planning and asset protection has helped many Americans organize and achieve financial success over their private financial resources. For more information visit

Exit mobile version