Estate planning w/ business involved

[Shawn Abadie]

Hello,

I'm posting for an extended family member who is going through a trying time and I think he has gotten some bad / incorrect advice.  My aunt and uncle are elderly, and have reached the point of requiring 24hr in-home care.  My cousin has power of attorney for his parents, and within the past three years, his father has signed over all the shares of the family business / corporation to him.  There's currently mortgages taken on the parent's house and his house to help pay for the care-givers, and the houses are not a part of the corporation at all. My cousin has worked in the business for about 25 years, and being an only child, he is the sole beneficiary of their will, including the business and personal assets.  Somehow, my cousin is convinced that if something worse were to happen to his parents (they are 90 and 88 yrs old with increasingly challenging health issues), and they would to be cared for in a nursing home, that the state of NJ would step in and claim all the assets to "pay" for their care.  My cousin keeps mentioning the "look back" regulation that requires transferred assets to be held for 7 years before he could liquidate them without the state "taking" everything.  Since the business has only been his for 3 years, he keeps telling me that he's killing himself to maintain the business for nothing, since he'll end up with nothing anyway.

None of this sounds right to me, but I haven't lived in NJ for 30 years.  He's going to see (more than one) estate / trust lawyer to find out what his options truly are, but I want to believe he could place all the business assets in a trust of some sort and liquidate them as necessary, which would provide the income necessary to care for his parents, plus some income for him while relieving him of the stress / burden of maintaining the business on his own.

Does that sound reasonable?  Any info / referrals would be appreciated.  Everything is located in Cape May County, NJ.

Thanks in advance.