Can Husband Transfer Assets to Protect Them from Second Wife’s Creditors?

 In Asset Protection, Long-Term Care Planning, Second Marriages

Question:

My father is in a second marriage and wanted to gift his money to me to protect it from the debts of his spouse and wife’s family. The plan would be to use this gifted money for his care until he passes. Can this be done without affecting Medicaid?

Response:

The transfer to you will cause your father and his wife to be ineligible for Medicaid for the subsequent five years. After that, you’re free and clear. But there are other issues to consider. There may be tax consequences to the transfers. You need to make sure the funds are secure in case something happens to you — bad health, death, divorce, bankruptcy, lawsuit. And your father has to be comfortable being impoverished and dependent on you. Ultimately, this has to be his decision and it’s best taken after consulting with a qualified elder law attorney.

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