Asset Protection

The Use of Promissory Notes to Protect Assets

With the use of a properly drawn Promissory Note, some assets can still be protected after someone is in a nursing home – typically less than 1/2.

THE GOAL:

To gift and protect a portion of a nursing home residents assets. A gift, referred to by Medicaid as a transfer, will create a period of time an applicant will be ineligible for Medicaid. This time period is commonly called the penalty period. We then need to have funds available to pay the nursing home throughout the penalty period.

THE PROBLEM:

The new law says that the penalty period doesnt start until the applicant is both institutionalized and resource eligible. Therefore, we cannot simply leave the clients funds in their bank account to pay the nursing home throughout the penalty period.

THE SOLUTION:

The promissory note is created and is the tool that we use to convert the available resources (the non-gifted funds) to a monthly income stream. As long as the promissory note is created correctly and meets certain criteria, the funds can no longer be counted as a clients assets but as income source. These monthly income payments, along with a clients normal monthly income such as Social Security and any pensions will then be used to pay the nursing home throughout the penalty period.

S.T.A.R.S. for Seniors, L.L.C.
Sharon Tuszynski's Application & Referral Service
518-283-5315 | Cell: 518-369-7573
email: sharon2642@nycap.rr.com