Asset Protection Planning
Whether you are concerned about losing your assets to a judgment creditor or to the Medicaid Estate Recovery Program, our asset protection planning attorneys can help.
At The Hale Law Firm, we offer two entirely different asset protection planning services:
- Lawsuit Asset Protection Planning, and
- Medicaid Asset Protection Planning
What is Lawsuit Asset Protection Planning?
We live in the most litigious society in the world. Every year, 80 to 90 million lawsuits are filed in the United States. Nearly half of all marriages end in divorce. Unfortunately, there is no way to completely avoid the possibility of being sued. There is, however, a way to reduce the risk of a devastating lawsuit, and to protect your assets.
Lawsuit asset protection refers to a set of legal techniques that protect a person’s property from potential creditors, including a divorcing spouse. Asset protection planning ranges from simple devices such as opening an IRA account, to more complex arrangements such as funding an irrevocable beneficiary-controlled grantor trust.
Lawsuit asset protection planning typically involves one or more of the following:
- Obtaining appropriate and sufficient insurance coverage;
- Transferring assets to a statutorily protected class of assets (i.e. residential homestead, life insurance, annuities, or a qualified retirement plan);
- Leveraging unprotected assets such as real estate investments;
- Utilizing liability shielding entities such as limited partnerships, corporations, and LLCs;
- Accumulating wealth in an asset protection trust; and
- Entering into marital property agreements to convert community property into separate property.
Hiding assets or fraudulently conveying assets to hinder a creditor offers no asset protection and is illegal.
At The Hale Law Firm, our asset protection planning attorneys design and implement asset protection plans for individuals and families residing in Texas. Our clients include doctors, lawyers, engineers, business owners, and others concerned about protecting their assets in the event of a lawsuit.
What is Medicaid Asset Protection Planning?
On March 1, 2005, Texas implemented the Medicaid Estate Recovery Program (MERP) in compliance with federal Medicaid law. Under this program, the state may file a claim against the estate of a deceased Medicaid recipient, age 55 or older, who applied for certain long-term care services on or after March 1, 2005.
Texas law limits the state’s MERP claim to the “probate” estate of the deceased Medicaid recipient. Our Medicaid asset protection attorneys assist our Medicaid clients transfer assets outside of their probate estate without triggering a transfer penalty or gift tax.
Protecting the Homestead from Medicaid
Clients can take comfort in knowing that we can protect their homestead through MERP exemption planning and with the use of an enhanced life estate deed, also known as a “Lady Bird Deed.”
We also advise clients on the advantages and disadvantages of selling, renting, or reverse mortgaging their home before and after applying for Medicaid.
Protecting Spousal Retirement Income from Medicaid
Medicaid recipients must often satisfy a Medicaid co-payment to receive benefits. For a married Medicaid recipient, it may be possible to divert retirement income away from the institutionalized spouse to the at-home spouse in order to reduce the Medicaid co-payment. This Medicaid asset protection technique involves an agreement for spousal support and court approval of a qualified domestic relations order.
Whether you are interested in lawsuit or Medicaid asset protection planning, we invite you to contact us today for a free initial consultation.