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The American dream is to work hard, build your life savings and purchase a home.  But what happens when that dream is threatened? What if you want your family members to benefit from your hard work? There are ways to protect your savings from the ravages of long-term care, future creditors and civil judgments.

Protect Your Savings from Medicaid Recovery

In some cases, Medicaid programs must at least attempt to recover money paid to Medicaid recipients. Typically, Medicaid will file a claim against the deceased recipient’s estate. However, there are ways to protect your savings from Medicaid recovery:

  • Alabama’s Partnership for Long-Term Care helps people buy long-term care insurance that will cover costs that otherwise might be paid by Medicaid. Although not everyone who applies will qualify, it’s certainly worth looking into.
  • Irrevocable trusts are a great way to protect your savings from Medicaid recovery because the assets transferred to the trust are no longer considered your property. Medicaid’s 60-month look back period still applies, however.

Other alternatives to Medicaid:

  • You can ask family and friends to agree to care for you in exchange for some type of compensation.
  • You may also consider transferring assets to spouses or family members.  However, this method could adversely affect your eligibility for public benefits. Another potential problem is taxes.  Additionally, once you transfer your assets to someone else, you lose all control over those assets.  Those assets are also subject to the creditors and predators of the person you gave them to including divorce, tax liens, bankruptcy filings and lawsuits.

Protection from Creditors and Predators

Some people need to protect their life savings from unscrupulous creditors or dishonest persons. Sadly, sometimes family members take advantage of elderly or disabled individuals by cleaning out their bank accounts with no remorse.

You can establish an asset protection trusts then fund it with your assets. In some cases, you may still receive benefits from the trust though it is protected.

Another option is to give money to family members or friends. However, you lose control of the assets, your beneficiary’s share may be taken by their creditors, and such transfers may hurt your Medicaid eligibility.

There’s one important thing to remember: you have to make sure you don’t violate fraudulent transfer laws when setting up an asset protection trust. If creditors are already filing claims against you, it may be too late to establish and fund an asset protection trust.

It’s best to consult an attorney before taking any steps toward asset protection.

Take Steps to Protect Your Hard-Earned Money.

Are you concerned about protecting your assets? Start planning now. Schedule an appointment with one of the qualified elder law attorneys at Miller Estate and Elder Law Our phone number 256-251-2137.  Or you may choose to use our Contact Form to get started on your path to peace of mind.


The following might be helpful, too:

Protecting Your Estate from Medicaid Recovery

How Do I Protect My Assets from Nursing Home Costs?