Asset protection advice needed

[bamiller]

My wife has been a diabetic since she was nine years old and her health is starting to fail. We have finally built up a decent net worth (approximately $1,000,000) and are looking for advice on the steps to take to legally protect as much as our assets as possible from future health costs. Thought about contacting some type of financial advisor but don't know where to start. Would appreciate input from those with experience and/or financial professionals.

[disneysteve]

protect as much as our assets as possible from future health costs

What do you mean by this exactly? The way it is worded, it sounds as if you want to avoid paying legitimate medical bills even though you have the funds to do so. I'm hoping that isn't what you meant to imply. Please clarify.

Without any more info, I'd say the best thing is to keep assets in your name rather than in her name or a joint account. That probably wouldn't work, though, if the insurance policy is through you.

[MonkeyMama]

You would need to seek out legal advice - an asset protection attorney would be a good place to start.

There are plenty of perfectly legal and legitimate ways to protect your assets in these type scenarios. It's fair to want to protect your retirement accounts, for one. So you have something to live off of once the medical bills are paid.

[disneysteve]

It's fair to want to protect your retirement accounts, for one. So you have something to live off of once the medical bills are paid.

Can medical bills go after assets in your retirement accounts normally?

[MonkeyMama]

Can medical bills go after assets in your retirement accounts normally?

Depending on the type of retirement accounts and the state you live in, yes.

In California, my understanding is IRAs have little protection from creditors, but work-retirement plans can not be touched.

Home equity is mostly not protected in California.

Thus, creditors can come after your home and retirement assets.

State laws vary widely. Some states will automatically protect a fair amount of home equity and IRA dollars, for one.

[bamiller]

[QUOTE=MonkeyMama;284677]Depending on the type of retirement accounts and the state you live in, yes.

I live in Ohio and I have been told, right or wrong, that they cannot go after ERISA qualified contracts (pensions, retirement accounts?) or IRAs?

[disneysteve]

Thus, creditors can come after your home and retirement assets.

So pretty much, they force you into filing bankruptcy because nobody is going to make themselves homeless to pay a medical bill.

[MonkeyMama]

@bamiller - you won't get a good answer unless you hire a qualified professional. I am NO expert, but I know legal experts in this field (aaset protection) and have heard plenty of horror stories.

The thing is, no one but the legal experts really understand all this stuff!

[yulianisakov]

There are powerful estate planning tools available that may help you protect your assets from U.S. creditors while still leaving you access to your assets. Also, there are U.S. based asset protection trusts that can protect your assets, but are more irrevocable in nature and can be time-sensitive. There are several options at your disposal.

[bamiller]

Thanks for all the advice.I have made an appointment with an elder law attorney.

[yulianisakov]

Great. Consider all your options. If the lawyer cannot provide you with the type of asset protection trust that your are comfortable with such as if the asset protection trust takes away your access and/or control over your assets, then there may be other asset protection strategies we can discuss as a part of your estate plan that will allow you access to your funds - let me know and we can sit down and chat further.

Yulian

[Robert742]

You have my sympathy regarding your wife's deteriorating health.

You want to make sure your elder law attorney has experience in asset protection. Elder law covers a lot of issues, and not every elder law attorney has expertise in all of them. Due diligence in researching your lawyer is essential. Also, be aware there are a lot of sales people pushing trusts and annuities promising asset protection you will want to avoid.

This link might help you find and choose an elder law attorney:

How to Choose an Elder Law Attorney | eHow.com

[MrPolarZero]

The best way that I can think of is by getting a comprehensive medical insurance coverage. However, you might find it a bit hard to do so, since not many companies would be willing to handle your wife's case.