🚫 government recovery

30 Aug 2024 · 1 min

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1:01

In this concise presentation, Jerry Taylor outlines four practical methods for protecting personal assets—cash and real estate—from being seized by the government or Medicaid when long‑term care is needed. He first advises making annual tax‑free gifts of up to $16,000 per recipient (with a $12 million lifetime exemption) at least five years before care is required. Second, he explains how to create a life estate, allowing the owner to retain residence rights while designating a remainderman who will inherit the home, also needing a five‑year lead time for Medicaid exemption. Third, he suggests placing funds in an annuity, noting that some states (e.g., Colorado) do not count annuity payouts against Medicaid eligibility, and recommends checking local regulations. Finally, he recommends transferring assets into an irrevocable trust, which removes ownership from the individual and can protect both cash and property from recovery.

Chapters

If you want to prevent the government from getting your money or your home, should you need long-term care, I've got 4 ways to help you do that. The first way is to start giving money to your kids and your loved ones while you're still healthy. You can give up to $16,000 per year to as many people as you want without having to file a gift tax return. Above that amount, you have to file a return, but right now your lifetime gift tax exemption is about $12 million. This needs to be done at least 5 years before you need the care. Second, create a life estate. With a life estate, you have the right to live in the home until you die, and then it passes to your remainderman. That's whoever you designate to get the home. And if you create that 5 years before you need the care, the home will be exempt from Medicaid recovery. Three, put your money into an annuity. Some states like Colorado do not count annuity payouts against you for Medicaid eligibility. Check to see whether your Medicaid rules and regulations allow that. And four, an irrevocable trust. Put your home or your money into an irrevocable trust.