Harry Williams
Attorney and Counsellor at Law

Professional, Practical, Prompt
220 East King Street, Suite 110
Johnson City, TN 37601-0110
Tel 423.773.3382
Fax 423.328.8434


Asset Protection

"Asset Protection" Defined

Asset protection consists of methods available to protect assets from liabilities arising elsewhere. It should not be confused with limiting liability, COURTwhich concerns the ability to stop or constrain liability to the asset or activity from which it arises. Assets that are shielded from creditors by law are few (common examples include some home equity, certain retirement plans and interests in LLCs and limited partnerships (and even these are not always unreachable)). Assets that are almost always unreachable are those to which one does not hold legal title. In many cases it is possible to vest legal title to personal assets in a trust, an agent or a nominee, while retaining all the control of the assets. The goal of asset protection is similar to bankruptcy, and the two practice areas go hand-in-hand. When a debtor has none to few assets, the bankruptcy route is preferable. When the debtor has significant assets, asset protection may be the solution.

Four Threshold Factors

The four threshold factors that are either expressly or implicitly analyzed in each asset protection case are:

  • The identity of the person engaging in asset protection planning
  • The nature of the claim
  • The identity of the creditor
  • The nature of the assets

Tenn Care

 TENNCARE LOGOTennCare is the State of Tennessee's Medicaid program that provides health care for 1.2 million Tennesseans and operates with an annual budget of approximately 9 billion dollars. For further details about the program, you can view a TennCare 101 Presentation or continue reading the TennCare overview here.

Medicaid pays for nursing home care when the patient meets all the medical, income, and asset eligibility criteria. Unfortunately, federal law requires the State of Tennessee to institute an estate recovery program. This is so that the State may recover funds paid out for the Medicaid patient’s care. Usually, the only asset left in the patient’s “estate” after death is the home.

They have heard that if Medicaid pays for care, then “the State” or “the nursing home” will take their home. Well, here’s the scoop: the home is an exempt asset for the patient’s (and his or her spouse’s) lifetime and sometimes beyond. Also, contrary to popular belief, TennCare does not file a lien on real property during the patient’s lifetime. After a patient passes away, the home may be subject to estate recovery by the State.

Under current Tennessee Medicaid law, the home is an exempt asset for the lifetime of the Medicare recipient as long as he intends to return home. Even after the patient dies, the State may not recover against the patient’s estate as long as there is a surviving spouse, a minor child, a blind child, a totally and permanently disabled child, a caregiver child, or a sibling with an equity interest.

Tennessee’s limited estate recovery means the State of Tennessee Bureau of TennCare must file a claim in the probate estate in order to recover the Medicaid funds paid out for the patient’s care. The probate code, Tenn. Code Ann. § 30-2-310, provides that in order for creditors to be paid, the creditor must file a claim within one year of the decedent’s date of death. There is an exception for the payment of taxes, which are still due and payable beyond the one year.



There are different options to preserve your resources, including your home, so that you will have access to the care you need as you proceed along the elder care continuum. There is time to make a plan.

For more detailed information on the exceptions to estate recovery, read Saving Momma’s Home at Caveat: Monica is updating the estate recovery section based on recent changes in the law. newsletter.

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