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Updated: April 17, 2023 10 Things

10 Things I know about ... Long-term care planning for small business owners

A smiling headshot of Christine Boutin
Photo | Courtesy of Christine Boutin
Christine Boutin is an officer at Worcester law firm Fletcher Tilton and is an experienced elder law attorney.


10) Don’t wait! Early planning is essential. MassHealth looks back five years from the date of application to see if any assets were gifted or transferred in ways it considers disqualifying.

9) Business assets are likely non-countable. For eligibility purposes, MassHealth will not count business property necessary for the applicant’s self-support toward the maximum asset amount of $2,000 an individual applicant is allowed to keep.

8) Non-countable doesn’t mean protected. Even though an asset may be non-countable for eligibility purposes, if the asset remains in the MassHealth recipient’s sole name at death, it may be subject to a clawback.

7) Then there is income. Self-employment income or unearned income (for example, rents) and all other income sources less allowable business expenses and other deductions must be used to pay for the applicant’s monthly care before MassHealth pays the remainder.

6) All trusts are not the same. Trust planning can be a critical key to advance long-term care planning, but only if the right type of trust is used.

5) Irrevocable trust. An irrevocable income-only trust can protect the home of a MassHealth applicant. It must be created and funded more than five years before the long-term care application is submitted.

4) Gifting. With limited exceptions, gifting not done more than five years before the MassHealth application is likely to be considered a disqualifying asset transfer.

3) Durable power of attorney is key. A comprehensive, well-drafted durable power of attorney should, for example, provide the agent with the power to continue the owner’s business, as well as allowing for the creation or funding of trusts and the authority to apply for public benefits.

2) Don’t DIY. Advance estate planning for long-term care and preparation of a MassHealth application are both complex processes subject to regulations, and errors could have long-lasting consequences.

1) Don’t wait to plan until you need MassHealth. Once you need it, it’s too late!

To learn more about planning for long-term care, register for Boutin’s April 25 webinar “Trust Planning for Elder Asset Protection.”

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