[00:00:00] According to pew research, over 90% of Americans do not have long-term care insurance. And yet at least half of Americans, 65 or above will need long-term care services at some point. This is really an important issue because, to be honest with you guys, Long-term care, the need for long-term care is possibly the number one threat to your long-term financial security.
In this world that we live in today. And so if you're not prepared for it, if you haven't done at least some type of planning, You can really get yourself into a situation that is not acceptable.
And so today I'm going to be talking about how to plan for long-term care, whether long-term care insurance is actually a good idea for you, and some things that you need to be thinking about in the planning.
This is the smart planning 1 0 1 podcast. From Honolulu Hawaii aloha everyone I'm Nicole Wipp and I'm your host.
So today things are going to be a little bit different because in this podcast episode, I actually am getting interviewed by my guest Cameron Huddleston. If you've listened to the podcast recently, you know, that Cameron was my guest on episode 39. But I want to reintroduce her to you for the purposes of this podcast.
Cameron, Huddleston is the director of education and content at Carefull, the first service built to organize and protect aging adults, daily finances. Cameron is also an award-winning personal finance journalist and the author of mom and dad. We need to talk how to have essential conversations with your parents about their finances.
She was a caregiver for 12 years for her mom who had Alzheimer's disease. So once again, yes. This is an interview that was prerecorded between Cameron and myself, where she was interviewing me about these issues, because this is my area of expertise. And so I really hope you enjoy it and learn something that's really going to help you and your family be smart planners.
Cameron Huddleston: Hello and welcome. We are going to be talking today about long-term care more than half of adults, 65 and older will need long-term care at some point, according to the department of health and human services. And so there's a good chance that you or your aging parents or someone you love is going to need long-term care.
And that's why I have with me today. Nicole Wipp. Nicole is an elder law and estate planning attorney. She's the founder of the family and aging law center in Michigan and Hawaii. And she is a big advocate of planning for longterm care. Nicole, thank you so much for being here.
Nicole Wipp: Thank you so much for having me here.
Cameron Huddleston: So I want to start by asking you why is it important to have a plan for long-term care and not just a plan, but a plan to pay for long-term.
Nicole Wipp: Okay. So there are several facets to my answer to that question, because the reality is for most Americans, it's absolutely essential that you have some type of plan to pay for long-term care.
And the reason is because. Almost no average American has the ability to pay for their long-term care needs. And so why do I say that? Medicare, for example, which is the primary insurer for most elder Americans does not cover long-term care services. Now some of you might be saying yes they do, because they covered X amount of our long-term care services in a facility.
Medicare will only cover up to 100 days and a long-term care rehab facility past 100 days, Medicare does not cover. And and that is only for rehab. They don't pay for straight long-term care services, no private insurance that I'm aware of pays for long-term care services.
And, very few people either have long-term care insurance or their long-term care insurance policy does not work the way that they thought or intended. So those are some of the reasons, but then the bigger reason is because if you add that on top of the cost of the long-term care.
See what most Americans don't realize is the cost of long-term care is actually probably far more than what you realize it is in the market areas, in which I practice law we're looking at 10, 12, 15, $17,000 a month. [00:05:00] And so a lot of times when we're talking about long-term care, we're talking about how to pay for it. The word Medicaid comes up and people will say to me I'm not going on the Medicaid's for poor people. And I say at 12 to $15,000 a month, how fast are you going to become a poor people?
Because it's really. A bigger expense than most people ever thought it was going to be. And then their insurance doesn't pay for it. So having a plan is absolutely necessary.
Cameron Huddleston: What would you say to those people who consider family to be their plan? " I don't want, I'm not going into a facility. No, one's going to put me in a nursing home. I'm not going into assisted living. My family is going to take care of me. My spouse is going to take care of me. My kids are going to take care of."
What is the flaw in that plan?
Nicole Wipp: Okay. The flaw in that plan is, first of all, you have to know that somebody is actually willing to do that. And the problem is that's not always true, but then it's also that somebody might be willing. But not recognize what that means. What it actually means to provide long-term care services to another person.
If I said, you know what, my mom can come live with me. That's fine. And you know what? It would be fine because if my mother came to live with me, if I had to do that, if she needed a place to stay, I would do it. Part of that might presume that my mom can still walk, still can use the bathroom on her own, still can feed herself that she doesn't need constant care.
When somebody needs constant care, that's where the problem comes into play, because it's one thing to have your parent come live with you, or if your spouse, if you're married and if your spouse just needs a little bit of like cooking and helping with things. But when somebody needs true long-term care services, we're talking, needing assistance with bathing, needing assistance with walking, needing assistance with using the toilet. Needing assistance with activities of daily living, which is the words that we use in the legal world and in the medical world, when people need significant help with that, your ability to provide care to that person goes down exponentially. And then on top of it, the issue of caregiver burnout is massive. Especially if you're relying on your spouse.
Listen, if you're in your seventies or eighties or nineties, and you're relying on your 70, 80, or 90 year old spouse to take care of you, pick you up off the floor if you've fallen, to clean you up if you've soiled yourself. These are significant caregiving duties that the heart might be willing to provide, but the body might not be capable of doing.
And I see this over and over and over and over again in my law practice is that people make these promises and then they can't keep them. And it's heart-wrenching and I always tell people, if you say that to your spouse, if you say that to your children, that's not loving. "You have to take care of me."
That is not a act of love, because you are asking somebody to do something that they might not be capable of keeping that promise. And then what have you done to them, but made them lie in a way. That's not loving. And and it's also not facing facts.
And so when we're thinking about this, your family is not a plan. Another thing that people frequently see, Cameron, you might've heard this one before. Somebody would say I've had so many people say to me "If I ever come to pass just shoot me, just push me off the cliff. Just send me out on the iceberg."
People say stuff like that to me all the time. And I'm like, okay, ha you're funny, but guess what? That's a felony and nobody's going to commit a felony for you. Nobody's going to shoot you like you can say that. Haha. And it's actually not funny in my opinion, but whatever, if you're trying to be funny ha. But nobody's going to actually shoot you. This is not going to happen. This country has decided that those kinds of things are not allowed. We don't just kill old people because it's convenient. And so that is ludicrous and let's just put that away. That's not, there's no plan with that. That doesn't, that's just something that people say to fend off the conversation in my experience.
Cameron Huddleston: I agree. And I'm glad that you were so honest with everything you just said, because. It is it's, it is 100% true.
I experienced it myself and I was a caregiver for my mom for 12 years, but I couldn't do it all by myself, four years into Alzheimer's disease, or I should say four years after my mom's diagnosis, we were at the point where she needed round the clock care. I couldn't do it by myself anymore. And it is like you said, it is round the clock.
And if someone does have dementia, they need 24 hour surveillance because they can get up at night and wander and fall and get [00:10:00] hurt. And if they're in a home, as opposed to a facility, they can wander off and get lost. And, I don't know many ninety year olds who have the energy to provide that sort of care, let alone someone who's my age.
I couldn't do that. And part of the reason was because I had small children too. And so you were so right. You family cannot be your only plan. You, of course, you want your family to be able to pitch in and help and be there to help oversee your finances, if necessary. But you can't count on your loved ones to be your primary caregivers.
And so, what do you do Nicole, to pay for professional care? Because you said it is super expensive. I know long-term care insurance is an option, but I know you're not a huge fan of it. So maybe you could talk a little bit at first about long-term care insurance, what it is and why it's not the right solution for everyone or anyone.
Nicole Wipp: Let me start by saying this, in theory I'm very much a fan of long-term care insurance. In theory, I think the intent behind it was good. I think that the idea that long-term care insurance was going to be there for this type of moment, like you would buy into it. And then when you needed long-term care services, you had this insurance to cover your needs.
That made a lot of sense about why it came to be. But the reality of long-term care insurance is what I have a problem with. I've been practicing law and I've been an elder law attorney for a long time now. And I do significant amount of elder law work. And when I say elder law work, what I mean specifically is this idea of transitioning into needing long-term care and what that means for families.
Okay. That's what I mean by it. I don't mean elder abuse. I don't mean things like that. I'm talking about transitioning into the need for long-term care. And the thing about it is in all the years of practicing and all the got hundreds and hundreds of clients I've had if not thousands at this point, I have yet to see a long-term care insurance policy that has worked in the way that the family or the person that purchased it intended.
Why? There's two issues that really cause problems in long-term care insurance. There's actually three.
The first one is the fact that long-term care insurance is quite expensive. And so what happens frequently is the cost of that insurance also is not capped. And so what we see is, at the point when you are going to most likely be at when you need it, which is around 80, the cost goes up exponentially, we're talking 100, 200, 300%. The premiums will increase at that point.
Now the reality is for a lot of my clients, they've been paying into that long-term care insurance policy for 20 years already, at that point. And so 20 years in, and now your premium goes up a hundred percent. Can you afford it then? And then what happens? People then give up that policy that they paid into for 20 some years and they get nothing in return. You give up that policy, you stop paying end of discussion.
So there's that, okay? Then there's also most, if not all long-term care insurance policies have a period, a waiting period before you can access the benefits. It's usually around 90 days. So in 90 days, then that could mean that you've accumulated $30,000 or more of long-term care payment needs, that will not be covered by insurance.
Now for some people that is something that they can afford. They won't like it, but they can afford it. Okay. For some people though, that is not something they can afford. And so that's something that you need to be aware of. You're looking at potentially incurring a huge cost before the insurance even kicks in. And that's a problem.
The third issue is that your premium is based on how much insurance that you actually buy. And you get a daily rate associated with your long-term care insurance. So if you buy a policy that covers $200 a day, let's say. See, to most people, if I said to them, if I asked the average person you have a policy and it covers $200 of care a day.
They'd be like, "wow, that's great. Wow. That's like a lot, right?" Like most people that's what I would think because, what do I know? Like the average person, but here's the problem guys. We're looking at the actual average costs of care being 300, 400, 500. We had a facility. It costs $650 a day.
[00:15:00] Okay. So that 200 bucks, isn't going to get you very far. And so does your income make up the difference? Does your spouse need that income? You know what I mean? Like these are the problems is people are usually not paying for the level of care that they're going to need, their premium won't cover everything.
Cameron Huddleston: I asked and I also know too that it's not most policies that are issued today, they don't provide lifelong benefits. Decades ago when it was first coming on to the marketplace, that's what insurers did, they would provide these life term benefits. And then they went out of business because they couldn't afford it.
So now you're getting three, five years, maybe eight years, most if you're lucky perhaps a shared benefit policy, but not only is it going to, like you said, Perhaps not cover those costs, but it won't last that long either. I guess maybe having some coverage is better than nothing, right? Helps offset some costs.
Nicole Wipp: And so it's really about thinking about all that. Now, if you had an existing policy, that's one thing. But if you're thinking about purchasing it at this point, what I tell clients all the time is buy a life insurance policy with a long-term care writer. Because then at least you have a life insurance that comes on the back end, if you decide not to use it and you haven't just lost that. Because otherwise it can just be throwing a giant amount of money down the toilet for a lot of people. That's what it ends up being. And so it's just really problematic.
If you're going to buy long-term care insurance, you really want to understand what it is you're getting how much it's really covering and whether that in the end is going to be worth it to you. Because that 90 day period is a huge problem for a lot of people. The difference of what the cost of care is versus what their policy covers, the longevity of the policy. Like you pointed out, these are all things that matter.
A lot of people assume that, oh, if I get into that situation, I'm going to be on death's door, and so therefore it won't matter. Like I don't need a policy that lasts more than eight years. Why would I need care for more than eight years? Oh boy. People, let me tell you the reality.
Long-term care. See, this is the interesting, the thing that we're having in this country right now. Medicine will keep you alive for quite a long time, but it does not mean that it will give you quality of life. That's the thing we're living longer, absent now the difference of law life expectancy due to COVID and everything else, but in general, we're living longer.
But we're not necessarily living better. And so we see it constantly where people, we're talking, 10 20 some, we have five clients that have needed 20 some years of long-term care services. Listen, people like bad things happen to good people, bad things happen to good people. And so we really don't want to have an assumption that we're immune from bad things happening to us.
Cameron Huddleston: No. And I, I thought the fact that my mom was in a memory care facility for eight years was a really long time. And she's, she was diagnosed at a relatively young age. She was 65 and didn't have any other serious health issues other than high blood pressure.
So I knew she was going to be living with Alzheimer's for a long time. And that cost was more than half a million dollars. It was eight years of care, that's a lot of money to spend on care.
Nicole Wipp: You live in a market area that's actually inexpensive?
Cameron Huddleston: I do in kentucky. It is. You were talking seven, 8,000. Her memory care facility was around $5,000 a month.
Nicole Wipp: And so that's in a part of the country where it's cheaper. I promise most of you, like I have, depending on where you're listening, you can't assume that your cost of care is going to be the same level of what Kentucky is that your Metro, my Metro areas are much higher than that. And so it's just really knowing these facts about your situation.
Cameron Huddleston: So you mentioned life insurance with a long-term care, benefit. Maybe you could talk a little bit more about that and talk about some other ways that people can plan for this expense that they're likely going to face as they get older.
Nicole Wipp: Okay. So I want to preface what I'm about to say by telling you that I am not a financial planner or a financial advisor. And so I say this partly because I am an elder law attorney. So I deal with these things every single day. I am saying life insurance policy with the long-term care rider set for the simple fact that you are not necessarily going to lose money. If you have a life insurance policy and then you choose not to use your long-term care rider, then you at least will have life insurance on the back end.
Conversely, the long-term care rider. If you choose to use it, then you use it. That being said, I don't even know that I'm a big fan of even that, but [00:20:00] if you feel like you need to do that, you can.
And here's part of the reason why, One of the things that we, and or if you're going to do that, then I would absolutely recommend that you consider what I'm about to tell you, which is if you're going to do that policy should be held by some type of asset protection trust and not by an individual.
Why do I say that? Because policies have value to them, right? A life insurance policy with long-term care rider is more likely than not going to be a whole life policy, not a term policy. And so therefore whole life insurance has cash value term insurance does not. And when things have cash value, one of the things that you should be considering as you age is having an asset protection trust. And what I mean by that is a trust that's specifically designed to protect your assets from the cost of long-term care.
And so this topic can be very confusing to people and people are like, what are you talking about? Because a lot of people to them, this is a, some new fangled idea that they're like, "I don't even know what you mean. Are you talking about an irrevocable trust? What kind of trust are you talking about?" So I'm going to try and break this down in the simplest way that I can, if we think about a revocable living trust. Okay.
Now what is a revocable living trust? A revokable living trust is a trust that is in existence. If it's your trust, it is in existence while you are alive. That's why we call it a living trust. And revokable means that you can change it or amend it in any way, shape or form while you are alive. Okay. And what is the purpose of a revokable revocable living trust? Why do people have them?
Revocable living trusts were created to avoid probate. Because the number one misconception in estate planning is that if you have a will, you will avoid probate. That is a hundred percent false. A will is a document intended for probate. It is inherently a document for probate. So for those of you listening, if you have a will and you think your family is going to avoid probate because you have a you are wrong.
That is false. You need to understand that right now, that is why revocable living trusts exist. They do what you thought the will was going to do, but doesn't, which is to avoid probate.
Cameron Huddleston: And probate is the legal process where your assets are distributed and where debts are settled and it's public correct?
This happens in the court system with that trust, like you said, you avoid probate things get passed on without going through the court system. It's not in the public eye and probate can be a very lengthy process. And depending on the state where you are, it can be an expensive process, correct?
Nicole Wipp: Oh yeah. This is what I, how I actually define probate. Probate is a lawsuit you filed against yourself with your own money on behalf of your credit. Okay. And so yes, it is a legal and it's true. Like we're both laughing and those of you listening might be like, what? Yeah. A lawsuit, you file against yourself with your own money on behalf of your creditors, because that is literally how probate works.
That is what happens. It's a core process. It goes it's for creditors. It is intended and designed to make sure that your creditors get all their due through the court process before anybody else does. And so if you don't want to have probate, if you want your family to avoid the time expense and just inconvenience of probate then a revocable living trust, maybe your next best option.
But here's the problem with a revocable living trust. A revocable living trust does not protect your assets during your life. One of the things that people frequently will say to me is I have a trust I'm protected. And I always say to them protected from what. And you know what, almost nobody can answer that question because they don't even know what they are protected from.
I'm going to tell you if you have a revocable living trust, what you are protected from your family, if your trust has been properly funded is protected from probate, but that's it people that's all it does for you. It does not protect your assets for you during your life period. End of discussion. And if anybody tells you any diff anything differently, they are absolutely wrong. That is not how it works.
And so that is why we have to move into potentially something that is. A asset protection trust. It's called many different things. The type of trust that I'm talking about is called many different things in my office. I call it an asset protection trust it's known across the elder law world, [00:25:00] maybe as a Medicaid trust, it can be known as an IPUG, an irrevocable pure grantor trust. So these are some different names that you might hear, but really what it is the purpose of it is to protect your assets for you during your life, from bad things that happen to good people, lawsuits, creditors, and the nursing home. And. Protect your family after death from probate. So it encompasses the whole entire thing.
Now, whether that trust is right for you, is something that you should be discussing with a qualified elder law attorney that specializes in this type of product. But I do want to caution people because this is the fundamental difference right now, this conversation between an estate planning attorney and an elder law attorney, because while I do both things.
I can tell you right now that almost no estate planning attorney, I know has the expertise to do that type of work. And so what I see a lot is that people go to their estate planning attorney, they get a revocable trust or whatever they get, and they don't even realize that this options out there for them.
And then they suffer the consequences of not having that option. And then when the crap is hitting the fan, so to speak that's when they come to me and then I got to go back and fix it and oh, by the way, it's not going to be cheap. But it's much cheaper to pay me actually than it is to pay the facility.
And so you really want to be thinking about these things and you should really be talking to another law. That's qualified in these topics.
Cameron Huddleston: Can you explain Nicole, what the benefit is of having this sort of trust when it comes to long-term care? Because I know this has a lot to do with Medicaid and being able to qualify for Medicaid, to pay for your long-term care. But I don't think most people would understand this. So maybe you can explain in detail how the trust comes into play when it comes to getting Medicaid, to pay for your care. Instead of having to pull the money out of your own pocket, or, use a long-term care insurance policy or count on family to provide
Nicole Wipp: Okay, so Medicaid is the primary payer of long-term care services for people in skilled nursing care facilities. And I'm using these very specific words because I want people to realize that an assisted living facility is not a skilled care facility, skilled nursing care facility. And so skilled care facilities are what we might traditionally consider to be nursing homes.
And they are the facilities that provide the highest level of care, 24 7 care. Okay. Assisted living while that can provide that level of care. It is not the purpose of that type of facility. It is to provide part-time care and So skilled care facilities are the highest level of care and Medicaid is the primary payer of that care.
The problem with Medicaid for most people is that you have to qualify financially to receive Medicaid benefits. And before I go any further, let's talk about this a little bit because. I've had a lot of people really come at me in the past about talking about qualifying for Medicaid and the idea of planning for Medicaid as an immoral act.
There are some people that will say to me, that's immoral to hide your money, to qualify for government benefits. Okay. And I understand why you may think that's true. And if you think that's true, then that's your business to think that's true, but it is not illegal to do this. It's a hundred percent legal, that's number one.
And the reality of the matter is I have, I, one of my offices is probably in one of the most conservative areas of my state, and yet I have never once had a client tell me that they did not want to access these benefits for their loved one when they were faced with the reality of it. Because when you're faced with a $12,000 a month, bill, you may feel differently if it's happening to you personally.
And so I'm just going to say that, and I know that, some people might not like me for it, but that's okay. I'm not here to be liked. I'm here to tell you the truth. And the thing is that. Medicaid is a benefit that if you're a taxpayer you've been paying into since 1965, so it isn't like you're getting it for free you and paying for it.
That's number one. And then number two. Most people, it doesn't matter. You can deplete your life savings if you want, but then you're [00:30:00] still going to go on Medicaid anyway. So I just don't understand, like you really have to take a step back and realize the truth of the situation. Okay. And so what does that mean?
What right now, and I'm going to give you some general numbers because it's different from state to state, but right now, We're looking at a situation where if you are a married person, meaning your spouse is still alive and your spouse needs care. The most you're going to be able to keep, and we're talking the most, is about $120,000, your house and your car.
That now it can be significantly less than $120,000. There are multiple factors that play into what that number is. And I don't, we would have to really sit and talk for almost an entire day for me to explain Medicaid to everybody. And I know nobody wants that. So that would be the most. You will be allowed to keep for the rest of your life.
Now, if you are single, and you need care, the most you are allowed to keep for the rest of your life is $2,000 your house and your car. Now, when I say $2,000, your house and your car, $2,000 period, not $2,000 a month, not $2,000 a year, $2,000 period for the rest of your life. That's what you need to do to qualify
And so a lot of people talk about in hyperbole, we're hyperbolic as a nation. We like to exaggerate a lot. But there's nothing hyperbolic about nursing home poverty. That's real. And so what that means is the government is going to force you to spend all of your money until you reach those levels that I just discussed.
And that is a problem for a lot of these. Almost anybody would think that's a problem for them. Do you really want to spend down to $2,000 because, oh, by the way, if your spouse dies, then you have to go to the $2,000. You don't get to keep that 120 max. And then, I always say to people, so now you have $2,000.
How are you going to pay for the taxes on that house? Is that even cover one year of your taxes? And if it does, is it cover next year's taxes? No. You can't use your income to pay for those taxes. Your income has to go to the facility. So now, what are you going to do? These are the financial realities of what that means.
And so everybody just needs to understand that now what can be done by using an asset protection trust is you can put some of the extra money aside into that trust that allows you to keep more than what the government says you get to keep. Now, I'm not going to get into the mechanics of how all of that works, because this is a complex conversation that needs to be had with a qualified attorney.
But the reality is you can use this trust to legally more than what the government says you can keep. And so that is the benefit of doing it. And I always tell people, you want to look at your asset protection trust as it's like an insurance policy. Now I want to be clear. It is not insurance. It is a legal product, but it's like insurance.
Why do we buy insurance? I buy insurance for my house in case my house burns down. I hope it never happens. I pray it never happens. And the likelihood of it happening is pretty slim. But if my house burns down, I'm sure going to be glad I have insurance. I buy a car insurance in case I get in the car. I don't intend on getting a car accident. I don't think I ever will. I hope I don't. I try not to, but if I get in a car accident, I'm sure going to be glad I had my insurance. Similarly, you get an asset protection trust. Why? Not because you expect to go into the nursing home not because you're convinced it's going to happen now because you're not going to try and live your life in a way that it's going to help you avoid it.
If you ever do, you're sure. Going to be glad you have it. And guess what? It's way cheaper than any long-term care insurance policy you could ever buy. Presuming you qualify for one. And this is the reason why, even if you did have a life insurance policy with a long-term care rider, then you would take that policy.
You'd put it inside your asset protection trust so that the value of that policy is not counted against you by the government, if you ever need long-term care. So that was a long and winding road to the answer to your question, but unfortunately, That's how it is and how you, I think people need the full context of the why in order to understand these things.
And that's what you want to be thinking about is how am I going to ensure myself, how am I going to ensure not insure, ensure my future does not get compromised or my spouse's future does not get compromised or my children do not get compromised by my potential need for long-term care.
One of the tools in your toolbox can be getting this type of trust, planning in place, and it's very effective. It works in every state. And so you want to be thinking about how to best protect yourself.
Now, I just want to say one thing, because earlier I said to you guys, I'm not a financial planner. Right? Let me also say to you that 99.9 times out of a hundred, your financial advisor is not [00:35:00] an attorney. And yet if they're giving you legal advice about what type of state planning you should be getting, I want you to question this.
I promise you that no financial planner has the level of education or knowledge or experience that I do in these matters. And so if they're giving you, because I talk to people all the time, they said my financial planner says that I only need blankety blank. I only need a revocable trust. My financial planner told me I don't need a trust at all.
Why is your financial planner giving you legal advice? It is so inappropriate. And I hope you're hearing me. If you hear this, you have to understand they don't have a law degree. They don't have a decade or more of experience in the law. To be a financial planner, you don't even have to have a college degree.
So please do not. And I'm not saying they don't, and I think a lot of financial planners mean well, but you cannot let somebody give you legal advice. That's not qualified to do.
Cameron Huddleston: And I would just reiterate what Nicole is saying. Long-term care planning. It's really not a DIY project you should be taking on.
Nicole Wipp: no!
Cameron Huddleston: It is complicated. Medicaid is an incredibly complicated system. And even if you want to apply for Medicaid, you really do need the help of an attorney to. Apply for it because it is so complicated and there's so many hoops that you have to jump through. And so I really would encourage anyone to, to meet with an elder law attorney to make sure you have all of your essential legal documents and to discuss long-term care planning so that you have a plan, and if you're, if you're fortunate enough to be able to pay for your long-term care out of pocket that's great.
But. Most people aren't and I, you know what you were saying, Nicole, about people feeling like it's immoral to do this. If you've got family who are counting on you for financial support, you've got a spouse. You don't want to become impoverished and leave your spouse impoverished.
If something happens to you while you were young and you still got to help kids get through college, but all that money is going to pay for long-term care what sort of position have you left your kids? And if that was the plan all along, if your kids are expecting you to pitch in and help out by shielding those assets, that money is still there to help support your children. As something happens to you while you're young to help support your spouse, who will be left behind and who might need care for himself or herself someday, and need money to provide that sort of care. And yeah, I would agree with you.
Nicole Wipp: I just address it can be a smart move. Yes. And I want to address a couple of common things that people would say that can get them into legal, hot water. Okay. A lot of times people will tell me, I'm just going to get, I was told that I can just give my stuff to my kids.
I'll just sign everything over to the kids and then I'll be fine. Please do not do this. Please do not do this. If you do it, the government will find out. You will be assessed a penalty for having done that, you will lose any potential for getting benefits and you will get penalized into the future, meaning you can make yourself ineligible, indefinitely, for ever receiving these benefits. So now not only have you signed everything over to your kids, but now you can't even get the benefits. Anyway, there is in almost every state right now, a asset tracking system that when you apply for Medicaid, They're going and looking at your financial transactions to see if you have done exactly that.
And almost nobody deals in just cash these days. If you have a bank account, if you have an IRA, if you have an investment account, if you have a house, everything is trackable. And so don't think that you're going to get away with this. I look back, the government looks back five years at everything that you did.
And so you don't want to be playing shenanigans. I always tell people the government knows your tricks, this isn't their first rodeo. They do thousands and thousands of these a day. And you're not going to outwit them.
Also things that may make perfect sense to you because they're logical and they might even be logical don't mean that they're legal. And cause I'm here to tell you guys a little secret. Not everything in the law makes sense. And so the law doesn't make sense frequently. And so don't try to use logic to think that you're going to get ahead of the law. The law does not always make logical sense. And so that's why you need a lawyer that's experienced in these things because. We know the things that you can and can't do we know how to play the game.
We know the intricate rules and things. I always tell people an elder law attorney is an attorney for regular people that does things that rich people have been doing forever. But now we do it for the regular people. We utilize the law to your benefit. So think about that. My clients are not rich people.
My clients are average Americans [00:40:00] that are just trying to get through. I don't work for the millionaires of this world. My clients are your aunt and uncle, your grandma and grandpa, your mom and dad, you the average American. And so we use these tools to benefit you. Isn't that lovely? Isn't that a nice, refreshing change that for once the average American gets to use these things.
And so it's just thinking about it that way, guys, like you want to really realize that you can take control of this. You can plan and you can try and get ahead of it to the best extent possible and then hope you never need it. That's what I hope for you and your family.
Cameron Huddleston: I'm going to leave it there because that is the perfect way to sum this all up.
I want to thank you so much, Nicole, for sharing all this wonderful advice and hopefully people are going to listen to it and take this advice because it is so important to plan.
To learn more about the specific asset protection trusts that I'm talking about in this interview, visit smartplanning101.com/20. That's smartplanning101.com/20 in that episode, I am interviewing David Zumpano, who is a nationally recognized expert on this type of trust. He and I deconstruct it and talk about who it's for, who it's not for and how it works, but of course your best thing would be to meet with a qualified elder law attorney.
To learn more about Cameron and the services her company provides. Visit the carefull website. It's get careful.com and that's with two L's we will be posting the links. In the podcast show notes.
And finally, if you have a question you want answered on this podcast or an idea for a podcast, I'd love to hear it. Visit smartplanning101.com/connect and make sure to subscribe as always. Thank you for listening everyone.