Protect Your Assets: How Older Adults Can Plan for Future Disability

This article covers topics such as choosing a nursing home, Medicaid planning, and general asset protection planning.

Planning early can prevent costly mistakes and reduce stress for your family. Contact an estate planning attorney to build a strategy that fits your health, finances, and long‑term care needs.

Who Needs Asset Protection?

Almost everyone will experience some type of disability, whether due to an injury, an illness, or mental health. We often can’t predict when such a disability will occur, so it’s important to think about what you want to happen if a disability renders you unable to manage your affairs.

For example:

• Who would you want to take care of your business?
• Is there someone you want to make decisions about your medical care?
• Who will take care of your children?

Without proper documentation of your wishes, your loved ones will have to follow the rules set out by your state.

Financial Realities for Older Adults

Older adult households often have higher net worth than their younger adult counterparts. Between the ages of 50 and 80, many households double their net worth. They often own their homes outright and no longer have mortgage payments. Medicaid and Medicare have begun paying out benefits, and their adult children are no longer dependent on their parents.

These factors, along with any fixed income along the way, can place older adults in an advantageous position to choose their living situation.

That’s not always the case, though. A lifetime of home loans, debt, and financial concerns may put older adults at a disadvantage, forcing them to rely on their adult children to manage living arrangements and healthcare costs.

Regardless, it’s never too early to start protecting your assets. It’s important that older adults begin the process as soon as possible to prepare for the cost of nursing homes or assisted living.

Legal Documents Used for Asset Protection

One of the best ways to protect your assets is with legal documents. Learn more about each type of document and the legal issues they help prevent in the links below:

• Healthcare powers of attorney
• Financial powers of attorney and DIY power of attorney form
• Advance medical directives
• Wills and DIY will creation form
• Special needs trust for vulnerable adults
• Revocable trusts vs. irrevocable trusts
• Living trusts

You can complete many of these documents with online DIY forms. Your family members can help you complete them from home and within your timeframe.

In some instances, you may be able to complete them for someone else if you have a power of attorney, guardianship, or conservatorship. Taking care of these documents before facing incapacity issues or death is essential.

For more complex situations or assets, you may want to talk with an estate planning attorney first.

A Financial Power of Attorney To Assist Older Adults

Some people will add a relative, friend, or adult child to their bank account so that someone can access it if they become incapacitated. However, this is not the best approach. If you die, that person is entitled to everything in that bank account regardless of what your will says about that money.

If you’re concerned about having someone take care of your financial affairs but don’t want to undermine your estate planning objectives, a financial power of attorney is a much better option.

A financial power of attorney lets you pick someone to access your bank accounts and other financial assets, but only if you become incapacitated.

Veterans Benefits for Older Adults

Veterans benefits offer a range of assisted living facilities and services. These can apply to servicemembers of any age, but are an especially crucial support for aging veterans.

These provided services and care needs often include:

• Healthcare coverage
• Long-term care insurance
• Rehabilitation services
• Compensation for people with a disability
• Education and skills training
• Retirement pension
• Help with home loans
• Burial and memorial services

Medicare Planning for Older Adults

Medicare is a government-run healthcare program designed to help care for the elderly and those with certain illnesses.

The program helps provide care for:

• Older adults
• Certain younger individuals with disabilities
• People with end-stage renal disease (ESRD)

Citizens help pay for Medicare through Social Security contributions over their lifetime. These are taken from paychecks until your Medicare eligibility begins. Qualifying beneficiaries can start getting Medicare benefits at age 65. It’s important to choose the right Medicare-managed care plan for you.

Older Adults and Medicaid Eligibility

Medicaid eligibility, on the other hand, is based on income. Medicaid is a government-sponsored health insurance plan for low-income individuals. The process requires a Medicaid application and approval. Medicaid benefits help those who are otherwise unable to afford medical care.

Caregivers should know their loved ones’ benefits and financial status to determine which options suit them. These plans, as well as other public benefits, can help with supplemental needs and care costs. Each county has legal aid programs, and most have special programs for older adults. These programs are funded via the Older Americans Act.

Medicaid Planning for Spouses

Medicaid also has spousal impoverishment benefits. This means a couple’s combined resources are considered. A certain amount is protected and set aside for one of the spouses.

They must still live in the community and are referred to as the “community spouse.” This term means they are the spouse of a Medicaid applicant but aren’t applying for their own long-term Medicaid care.

Asset Protection Planning: Who Can Help Me?

Asset protection often involves overlapping issues, like long‑term care costs, Medicaid eligibility, estate planning, and disability planning. The right professional depends on your goals and the legal issue. For example:

• Elder law attorneys help with Medicaid planning, nursing home contracts, and incapacity documents.
• Estate planning attorneys focus on wills, trusts, and protecting assets.
• Business or commercial attorneys can handle business concerns or design strategies to protect your business.

Planning Ahead for Nursing Home Care

One of the biggest concerns for families of older adults is how to cover the high cost of a care facility. While the different levels of assisted living are essential for many older adults, they can cost thousands of dollars a month.

First, be sure you pick a nursing home that will provide the high level of care and quality of life you are paying for. Also consider these options to pay for assisted living or private long-term care insurance. In some cases, Medicare will help pay for short stays of not more than 100 days if your loved one meets specific criteria.

Don’t forget the rights established by the Nursing Home Reform Act. There is a Nursing Home Resident Bill of Rights for those living in covered facilities to help protect their dignity and prevent older adult abuse.

Plan Well and Plan Early To Best Protect Your Assets

There is often no good time to discuss future disability and asset protection planning. These conversations can be uncomfortable and emotional. But they are necessary. Starting the process early—when you’re still healthy—is the best way to alleviate stress, uncertainty, and undue burden on yourself and your family.

Older adult law attorneys are experts on these topics and can help start the conversation. They can also refer you to legal professionals in other areas, if necessary. 

FindLaw’s directory of older adult attorneys can get you started. Enter your city or ZIP code for a list of legal experts in your area. Because state laws are relevant, your lawyer should be licensed in your state. Your search results page will also show important details about potential attorneys, like ratings and whether they offer free case evaluations.