Practice Area: Elder law
Outcome: Simple plan to protect the client's assets
Description: Client's came to me becuase they were concerned that their mother may need long term care in the future. They wanted to make sure that they protected their mother's assets to the greatest extent possible while ensuring she would receive excellent long term care. Their initial thought was that they should simply gift money to the family or even transfer it into a trust. I counseled them that their first consideration should be non-exempt transfers. Beyond the non-exempt transfers they should examine other options that allow assets to be transferred without the risk of a penalty period. In this case mom was living with one of the siblings was receiving day to day assistance and care from that sibling. I suggested to them that they should examine the option of a caregiver agreement that would result in the sibling providing the lodging and care receiving compensation for those services. Becuase their mother was actually receiving fair value in the form of lodging and care for the money she was transfering to the caregive child, their would not be any penalty period. Given the mother's health and the potential risk that she would need heightened custodial care, a solution that minimized the risk of a penalty period was far superior to the outright gift or transfers the family was contemplating.