Asset protection from MediCal recovery

Long term care is costly. Be proactive, include a life insurance agent and estate planner/lawyer in your retirement planning.

Text 408-854-1883 for tax free, avoid probates Index Universal Life Insurance, to grow your savings for lifetime retirement savings and for lifetime retirement income, with no negative returns like 401k, Athene Fixed Index Annuity can avoid probate, safe and have guarantees for your lifetime retirement income with no market downturn.

Ruth and John, a married couple, spent their lives, their working lives, building up their nest egg for retirement. They enjoyed the fruits of their labor and they both retired for about 10 years. Then John was diagnosed with Dementia. Ruth cared for him for as long as she possibly could, about seven years, but eventually, John needed to be placed in a care home because she could no longer care for him. She found a skilled nursing facility that cared for late-stage Dementia patients, and they charged a whopping $12,000 a month. Within two years, their savings was wiped out, and Ruth applied for long-term care benefits through Medi-Cal. She was able to keep their house, as it is exempt from calculations and qualifying for Medi-Cal. And because she had spent all the savings paying for his care prior, they met all the requirements to qualify for Medi-Cal, and John’s health care or skilled nursing facility costs were paid for by Medi-Cal for another 18 months until he passed away.

After John’s death, Ruth lived another five years, and at her death, all their assets were to go to their two children. However, the only asset left in their estate was their house, ’cause it was exempt at the time John applied for Medi-Cal. Well, after Ruth died, the children received a notice from Medi-Cal demanding to recover the $216,000 they had spent on his care during those 18 months.

You’re thinking to yourself, “Can they do that?” Yes, they can. It’s called Medi-Cal Recovery. And as a result, the children received pretty much nothing, because Medi-Cal places a lien on the house, the house is sold, and their recovery debts are paid through that money. And it’s only after those debts are paid do the children inherit.

Could Ruth and John have prevented this? Yes. They could’ve prevented the depletion of their savings for his care initially, and they could have protected their home from any recovery that Medi-Cal would seek after they both passed away. But she didn’t seek out that advice or that help, and often people don’t know that it’s out there. If she had contacted a qualified attorney who handles Medi-Cal benefit planning, she could have at least saved the home from recovery.

Asset Protection Iron Triangle by Charles Lamm

Asset protection is not just for the wealthy any longer. When a middle class home can easily run a half million dollars in Florida or another state, and over a million in California or other state, anyone can become a target of lawsuits, divorce courts, and the IRS.  You have to dig a well before you are thirsty, or in this case, build a legal fortress before invading barbarians reach your gate.

Your tools to protect your assets are:

  • “no asset” C corporation
  • Limited liability company (LLC)
  • Beneficiary controlled trust

C Corporation

  • A “no asset” C corporation will be the management company for your LLC. The two work together to protect your property from those who would take it from you.
  • You are employed by the C Corp, not the LLC. You can also be the sole shareholder and hold all of the officer positions. Your corporation owns nothing but a checkbook.

Your corporation can pay for:

  • medical insurance for the officers
  • life insurance ($50 thousand limit)
  • retirement plan

As an officer, you can be reimbursed for out-of-pocket medical expenses through a medical expense reinbursement plan (MERP).

Entertainment expenses directly related to the business can include:

  • training expenses
  • travel
  • meals
  • computer expenses
  • phone expenses
  • business gifts up to $25 per recipient
  • Never let your corporation pay for personal items. Commingling of funds could pierce the corporate veil and make you personally liable for corporate debts in the event of a judgment against the corporation.
  • Consult your CPA or tax advisor for the latest changes in allowable deductions.

LLC

  • Your limited liability company is where you earn your income. Your LLC should also own any vehicles, equipment, computers, copiers, printers, and real property.
  • You want your Operating Agreement to make your corporation the Manager of your LLC.
  • Your LLC should also pay the bulk of your operating expenses for your office, supplies, travel, fuel, utilities, phone, computers, and more.
  • Your interest in the LLC will be as a 99% member will be owned by the trust.

Beneficiary Controlled Trust

  • A beneficiary controlled trust is the crown jewel of asset protection.
  • While I will not go into detail here, a BCT works like this:
  • Someone other than yourself establishes an irrevocable trust with you as the beneficiary and as the Investment Trustee. A second entity or person is required as the Distribution Trustee.

Seek Advise

Charles Lamm’s company, _________Services, Inc., can act as your Distribution Trustee if you want to keep your affairs private from your friends and relatives.  __________ to take advantage of Florida’s excellent trust laws, as well as no state income tax.

  • The Grantor can put up to $12,000 per year into the trust without gift tax considerations, and you have an immediate right to withdraw the money as it is a Crummey defective grantor trust.
  • It’s complicated, but the idea is to leave the assets in the trust and use the trust to own the LLC and to take care of your needs.
  • The trust can purchase property, pay for your education and medical expenses, and take care of your physical well-being. You have full control over the trust assets without actually owning anything.
  • As the Investment Trustee, you control how the assets are used, and you can replace the Distribution Trustee at any time.

Summary:

  •  You are now isolated from lawsuits, creditors, judgments, ex-spouses, and the IRS.
  • Location within Broward and the state of Florida
  • Location within Broward and the state of Florida (Photo credit: Wikipedia)
  • Charles Lamm is a retired attorney who owns Trustee and RA Services, Inc., in Coral Springs, Florida. His asset protection blog can be found at http://trusteeandraservices.ml

How much of your savings, investments, retirements and other funds are tax free?

The best time to pay taxes is today and not in the future when our investments or savings are bigger, which translates to bigger taxes. So your 401k savings is really not totally your own, half of it goes to IRS.

Let me show you a cash flow analysis looking at your income taxes, deferred taxes and other taxes to ensure that you can have a tax advantaged financial plan.

What are your reasons for opening a particular investments or savings account?

Are you satisfied with the amount of future income taxes incurred from your savings or investments?

Let me help you navigate your cash flow, showing your graphically using the Life Balance Sheet, protecting your from incurring more taxes and reallocating your assets, maximizing your wealth and protecting your cash accumulation.

When do you want to retire? Each age group, the younger 40s and the 40plus generation have their own path to achieve the maximum wealth accumulation in a tax advantaged way.

I will plan for your finances ensuring that any tax increases over time is accounted for in your overall financial plan. Using proper asset reallocation, I will ensure that you have the cash value and net worth taking into account lesser taxes that is eating up your savings or investments. Each year, we will proactively be on top of your financial plan to get all your money back eaten by taxes.

Together we will take action so that you did not lost any opportunity costs.

Connie Dello Buono

Financial Planner

CA Life Lic 0G60621

408-854-1883

motherhealth@gmail.com

How Roth IRA Distributions are taxed

How Roth IRA distribution are taxed

If you have 401K, stocks, mutual funds, Roth IRA, IRA, annuities or other kinds of assets, you need asset protection using your life insurance.

Use this life insurance application to complete when you decide after discussing with me about your asset protection plan with illustration detailing cash accumulation, face amount and tax strategies. Connie Dello Buono 408-854-1883 motherhealth@gmail.com CA Life Lic 0G60621 Life Insurance Broker in 50 US states

Life Insurance Application Guardian

retirment knowns and unknowns

From spender at 20 yrs old to senior citizen at 66 yrs old

age 0 to 100 lifestyle

Life teaches us a lesson. Before we lose everything, create a budget and save.

It is not late whether you are in the spender group or senior group, let me help you avoid RMD, and being broke or losing money in stocks or other high risk investments.

Call for appointment. Connie Dello Buono, retirement planner CA Life Lic 0G60621

408-854-1883

motherhealth@gmail.com

California and 50 US states

1708 Hallmark Lane San Jose CA 95124