In social functions, I always get asked about the new Medicare nursing home qualifications. Seniors become very anxious about having to spend-down their assets with no cap on the amount that they can keep. This unlimited drain on their funds is of major concern to the healthy spouse, and because the sick spouse can't do anything about getting sick, they become more and more depressed. These folks are of the World War II generation and the market crash of 1929 mentality. If you don't have the cash you don't buy it. Most of them got a credit card only because they had to pay their prescriptions over the mail.

Their health and well-being depends on knowing that they can tap into their resources to get what they need or when their grandkids come to visit they want to reward their visit with a few bucks. My mother is of this vintage, and I know that when my kids drop in for a visit, it makes her day. She wants to give them something in return, not because it's an enticement to come back, but she doesn't get out enough visits and she values their time, especially in this day of instant gratification with Ipods, Internet, cell phones, video, etc. and because they valued their grandmother more.

So, how can I hide my assets from Medicare is relevant to their lives. My answer is that if they did not do something as far back as five years ago, chances are that trying to do something now, could very well be considered a fraudulent conveyance in order to defraud a potential creditor. For example, if they were to put their son or daughter on the deed of the house without adequate consideration, it would be considered a” fraudulent conveyance” because they did it for less than the fair market value, they received nothing back in return. Or, if they did recognize that they gave away the house to their children it was a taxable gift and taxes are due on the transferor (the person giving the gift has to pay the tax, the person receiving the gift is always after taxes). But like many people they don't think it through in terms of filing of a gift tax return or fraudulent conveyance. They just do it for their convenience.

The new Medicaid spend down provisions are very restrictive. The intention is that if you (the elderly) have assets, before you qualify for nursing home assistance, they want you to become a welfare recipient. And that's what seniors are afraid to become. Their generation never asked for assistance if they had a strong back, they worked for their dignity. They don't want to become “welfare recipients” it a very humiliating concept to them.

Most common mistakes committed by seniors when trying to hide their assets:

1.Naming their children as (Parent's name “and” Child ‘s name) (Parent name “or” Child's name) on their savings, checking, investment accounts, or near cash accounts. THIS IS NOT A GOOD IDEA. Too much risk, what if child gets sued, or divorced, or worse dies. You open a new can of worms.

2.Give the house to the children. You name one or more of the children. Again not a good idea. What if the children get sued, divorced, or prematurely dies. There's too much risk.

3.Cash under the mattress, in between the walls, in the basement, etc. Well it works, but unless you tell someone the hiding place, then what? Or, leave the cash to lose interest or depreciate with inflation?

In God we Trust.

Trusts are the most common and useful legal devices. An “Irrevocable Trust” works best for hiding your assets. Your assets are RE-POSITIONED from you to an irrevocable trust. You “legally” no longer own the assets. This involves the actual transfer of assets to an independent trustee who will independently manage and actually own the assets for the benefit of all beneficiaries. This type of control over assets is not new, it goes back to medieval times when landlords went off to the crusades and left their lands in trust of monks for when they returned. There are specific laws and it's generally accepted by the judicial system as a legal, acceptable method of protecting one's assets for legal protection and tax minimization.