When Nobody's Coming to Check: Family Estrangement and the Aging-in-Place Plan

Most of what we discuss on this blog assumes a certain baseline: that somewhere in an aging person's life, there's at least one family member paying attention; someone who'll notice the new hesitation on the stairs, the grocery bags left half-unpacked, the bruise nobody wants to explain. Although this "noticing" can be supported with technology (like Care Predict for the home). A growing body of research says that assumption is increasingly wrong for a lot of American families, and it's worth asking what that means for how we plan.  

Recent reporting on family estrangement points to numbers that are hard to wave away. National survey data has found that roughly a quarter of American adults are estranged from at least one parent, and separate research puts the broader figure, i.e., anyone estranged from any family member,  at over a quarter of the population, literally tens of millions of people. The drivers aren't the dramatic ruptures we might picture. Some sociologists describe it as a structural mismatch between generations: older adults raised on the idea of filial duty and loyalty, and younger adults who expect parental sacrifice, ease and a lack of burden, emotional safety, and the right to set boundaries,  even with a parent. When one generation expects loyalty and the other expects sacrifice, the relationship often doesn't survive the gap. Add in unresolved grievances, a party's refusal to acknowledge past harm, financial or inheritance disputes, or rejection tied to a party's identity or choices, and you get a slow accumulation of reasons rather than a single dramatic break.

Aging-in-Place Planning Relevance

We often focus on on physical hurdles, such as the dark hallway, the unsteady step, the grip that's starting to fail. Those are solvable with observation and good design. Estrangement introduces a different kind of hurdle, and it's one no amount of grab bars or lighting will fix: nobody's there to observe or help.

Aging-in-place planning often quietly assumes an informal monitoring network such as an adult child who calls, visits, or at least notices when something's off. When that network has broken down, three things happen that matter for anyone doing this planning work, whether professionally or as a more distant relative or friend:

• Hurdles and Barriers Go Undocumented: The observation-first approach we've written about here depends on someone actually walking the routes and watching. An estranged adult child isn't doing that walk-through. If no one is, those hazards accumulate invisibly until a fall or crisis forces the issue: exactly the outcome early planning is supposed to prevent.

• Procedural Memory Support has no Witness. For an aging parent living with early memory changes, the routines and landmarks that provide comfort and reduce agitation are usually noticed and protected by someone who's paying close attention over time. Estrangement removes that witness, which means changes to the home, even well-meaning ones by a hired contractor or a distant relative, are more likely to disrupt cues nobody realized still mattered.

• The support has to come from somewhere else. When family isn't available, or isn't welcome, the observation-first structure this blog champions still works; it just needs a different observer. That might be a professional aging-in-place assessor, a home health aide, a geriatric care manager, a trusted neighbor, or a paid companion. The method doesn't require a relative. It requires someone who shows up regularly enough to notice change.

The Legal Side: When the Person on Paper Isn't the Person in the Room

The observation gap is only half the problem. The other half sits in a filing cabinet, and it's arguably more dangerous, because it's invisible until a crisis exposes it.

Most estate plans and health care documents are drafted at a moment when the family relationships in place today are assumed to be permanent. A power of attorney names an adult child as agent. A health care directive names that same child as proxy. A will or trust entrusts the estate to a particular child, and leaves it to "my children, equally." Years later, if one of those relationships has quietly ended, the paperwork doesn't know that. It still says what it said. And an estranged child who is legally the agent, whether or not they intend to act, and whether or not they're even reachable, can block a more available and willing person from stepping in without a court proceeding to sort it out. A stale document naming the wrong person is often worse than no document at all.

A few concrete steps matter here, and they're worth revisiting on a regular schedule, not just once:

• Update Core Documents when a Relationship Actually Changes: Do it now,  not years later. Don't presume that the relationship will heal with time.  Although it might, it's easy enough to restore authority when it does.  Powers of attorney, health care directives, and beneficiary designations should reflect who is genuinely present in your life right now.  As with all planning, assume the worst, but hope and continue to work for the best. 

• Consider a Trust Rather than Relying on a Will. A well-drafted trust offers more control and  privacy, and it can address an estranged beneficiary,  whether including them, limiting them, or excluding them, without airing that conflict in a public probate proceeding.  Trusts solve problems, and build resilience over time.  Wills are poor planning documents, unable to resolve disputes privately, and become fragile over time.  

• Name a Real Alternate. If an adult child is unavailable, unwilling, or simply not the right choice, identify someone else, for example,  another relative, a close friend, or a professional fiduciary,  who can actually serve as agent or trustee.

• Put a brief statement of intent behind any decision that treats one child differently than another. Done carefully, this reduces the odds of a later challenge based on claims of undue influence or incapacity.

None of this requires resolving the estrangement itself, or deciding who was right. It requires being honest that the documents should describe the people who will actually show up and not the people you once assumed would.

Building the Chosen Family That Fills the Gap

This blog has written before about building a chosen family for seniors who are aging in place without close relatives nearby — "solo agers," as the term goes, though estrangement creates the same practical reality even when a child is alive and simply absent by choice. That piece is directly relevant here, because the antidote to an estrangement gap and a solo-ager gap is the same: intentional community.

A faith community, a senior center walking group, a geriatric care manager, a trusted neighbor who checks in; any of these can become the observer who notices friction points, the visitor who protects a familiar routine, and eventually the person named in an updated power of attorney or trust. Building that network doesn't happen overnight, but it doesn't need to be large. A handful of consistent, reliable connections can do the work that an estranged family member no longer will, both the everyday watching and, with the right legal steps, the formal authority to act.

A Note on the Other Direction

It's also worth sitting with the less comfortable half of this picture: sometimes the aging parent is the one who caused the estrangement, and reconciliation genuinely isn't the goal or the safe choice for the adult child. Planning for aging in place doesn't require resolving that history. It requires being honest about who is actually available to help, rather than planning around a family member who, for good reason or bad, isn't going to be the one walking through the door.

The Takeaway

Family estrangement is now common enough that it has to be treated as a real variable in aging-in-place planning, not an edge case. If you're helping someone plan , whether you're a professional, a friend, or a more distant relation,  the first honest questions are the same: Who is actually going to be watching? And do the legal documents already say so? If either answer comes up empty, that's the gap to close, through updated paperwork, a deliberately built chosen family, or both.  Close the gap before a crisis forces the issue.

Family Wealth Is Evaporating As the Cost of Aging Soars: Proactive Planning Options

Economists have long described the coming transfer of wealth from baby boomers to younger generations as the greatest in history. Estimates have ranged from $68 trillion to $84 trillion expected to change hands over the next two decades. A closer look at the data, however, tells a sobering story. A July 2026 Washington Post analysis of Health and Retirement Study data found that the costs of aging are quietly eroding, and in a growing share of cases, obliterating, the very wealth families hoped to pass on.  Worse, adult children, rather than being the beneficiaries of generational wealth, are in some cases spending down their own savings to pay for their parents’ care. 

washingtonpost.com

A Large and Growing Problem

The Health and Retirement Study is a federally funded survey following thousands of Americans from their early 50s until death, recording their finances every two years.  The Washington Post examination focused on the spending of seniors in the final decade of life, and revealed that:

• The median out-of-pocket care spending per person was $19,179.
• One in six spent more than $50,000.
• One in twenty spent more than $100,000.
• The share of people left with essentially nothing after care costs rose from 6% (those who died 2006–2010) to nearly 11% (those who died 2017–2022).
• Among the poorest fifth of Americans, 41% were left with nothing, having spent nearly one-third of their wealth on care.
  finance-commerce.com

These figures understate the full burden because they often exclude room-and-board costs in assisted living or nursing facilities. Median assisted-living costs reached roughly $74,400 per year in 2025, while a private nursing-home room averaged about $129,575 annually. Multi-year care for dementia at that cost can approach or exceed $1 million. 

Medicare generally does not cover custodial long-term care. Only about 3% of adults overall, and roughly 15% of those 65 and older, carry long-term care insurance. The result is that families, particularly middle- and lower-wealth households, absorb the cost.

The popular narrative of a massive, relatively automatic wealth transfer therefore requires significant qualification. For many families, the cost of aging is not merely reducing inheritances; it is eliminating them.

Planning Responses: A Structured Approach

The good news is that families are not without planning tools. Effective responses generally fall into several complementary categories. The order below reflects a practical sequence many elder law and aging-in-place professionals recommend:

• Aging-in-Place Planning- Keeping Care at Home Whenever Possible:  The single most powerful way to reduce the financial and human cost of aging is to prevent unnecessary and avoidable institutional care.  To reduce the cost of extended hospitalization, Medicare encourages skilled nursing or institutional rehabilitation care on a limited, temporary basis after a qualifying hospital stay. This care is intended to make it possible for a patient to return home.  In practice, these short-term stays frequently become long-term placements. This is the case for those patients who have nowhere suitable to go after their Medicare days are exhausted.  Planning ahead, though, and making a  home a suitable alternative can avoid prolonged or permanent institutional care for these patients.  

But the more sobering story is for those who select institutional care for temporary rehabilitation and find that the choice of institutional care transformed a temporary need for rehab into a permanent need for on-going care. Whether that permanent need results from the high incidence of medical mistakes that occur in nursing homes, acts of other patients, security risks, transport risks, or merely the higher risk of infectious diseases which exists even in nursing homes that maintain a high quality of care, the harsh reality is that institutional care has risks that simply do not exist at home.  These risks can cause permanent, physical, psychological, or emotional injury or impairment.  Simply, once a person is in a nursing facility, returning home becomes significantly more difficult. 

  

Deliberate aging-in-place planning focuses on:  

• A trust, durable powers of attorney, and advanced directives specifically planning for and directing: (1) aging in place; (2) competency and physical capability determination and management; (3) family caregiving; and (4) guardianship protection, each separately protecting the right and ability to stay home, the trusted decision-makers, the maker's advanced decision-making, and the necessary assets; 

• Home modifications that improve safety and accessibility;

• Early arrangement of home-care services and supports;
• Technology that enables remote monitoring and daily check-ins; and
• Clear family agreements about caregiving roles and limitations.  

Keeping care at home whenever possible does more than support independence. It preserves familiar routines, reduces the risk of the disorientation and decline that often accompany institutional placement, and gives families greater control over the quality and continuity of care. For many older adults, remaining in a known environment is itself a form of protection — one that no facility can fully replicate.

• Traditional Financial Planning Tools:  Keeping someone safely at home is almost always less expensive than institutional care and preserves dignity, autonomy, and family wealth far more effectively.  Even with strong aging-in-place efforts, though, some paid care is often required. It is important to remember that care expenses are monthly recurring expenses.  Predictable, guaranteed sufficient income may provide better protection than simply a seemingly large sum of cash or investments.  Discuss both strategies with your advisor.  Traditional financial planning tools can help create both liquidity and income streams. Common options include:

• Long-term Care Insurance;
• Home Health Care Insurance. 
• Catastrophic Health and/or Disability Insurance
• Annuities (including bonus or income annuities designed to generate predictable, guaranteed cash flow).
• Indexed universal life or other permanent life insurance structures that can provide living benefits or cash-value access.
• Professionally managed brokerage accounts designed for systematic withdrawals.
• Reverse or traditional mortgages (particularly for homeowners who wish to age in place and unlock home equity without a monthly repayment obligation, reverse mortgages may be an acceptable last resort).

Traditional long-term care insurance can shift a substantial portion of the risk of high care costs. Hybrid products (life insurance or annuities with long-term care riders) have become more popular because they address the common concern of “use it or lose it.” Coverage is most affordable and attainable when purchased before significant health issues arise. Families should review existing policies carefully for benefit triggers, inflation protection, elimination periods, and the financial strength of the carrier. 

 

These, and other tools involve trade-offs among and between liquidity, risk, fees, tax treatment, and longevity protection. Any financial product decision should be made with a qualified professional who can evaluate the full picture of risk and reward in light of the individual’s health, other assets, and goals. Product illustrations and marketing materials alone are insufficient.

• Medicaid Planning, Including Medicaid Asset Protection Trusts (MAPTs): For many low- or middle-income families, Medicaid remains the only realistic way to cover extended long-term care without complete spend-down. Properly structured Medicaid Asset Protection Trusts, when funded outside the applicable look-back period, can protect assets while still allowing eligibility for benefits. Other Medicaid planning techniques, careful use of spousal protections, exempt resources, qualifying caregiver exemptions for asset transfers, caregiver agreements, and spending strategies, also play important roles. This area is highly technical and state-specific; do-it-yourself approaches frequently fail.  These are best left to elder law attorneys. 

A Coordinated Strategy Works Best

No single tool solves the problem. The most resilient plans typically include:

• Aggressive efforts to support aging in place;
• Thoughtful use of financial products for liquidity and income;
• Appropriate long-term care insurance where available and suitable;
• Timely Medicaid planning for those who may eventually need means-tested benefits; and
• A collaborative approach among and between professionals.

Early conversations and early action matter. Once a care crisis arrives, options narrow dramatically and costs escalate.

A Final Word

The Washington Post analysis provides a valuable public service by documenting how the costs of aging are quietly consuming family wealth. The projected multi-trillion-dollar wealth transfer will still occur for many higher-wealth households. For a large share of middle- and lower-wealth families, however, the transfer is being substantially reduced or eliminated by care expenses.

Proactive planning cannot remove every risk, but it can meaningfully change the trajectory. Families who treat the cost of aging as a predictable planning issue rather than an unpredictable crisis are far more likely to preserve both independence and a portion of the legacy they hoped to leave.

This article as inspired by: Federica Cocco and Shannon Najmabadi, “As the cost of aging soars, families’ wealth is evaporating,” The Washington Post, July 22/23, 2026.

Prenuptial Agreements and Premarital Trusts for Seniors, Second Marriages, and Blended Families

Prenuptial agreements ("Prenup") are often portrayed as tools reserved for the ultra-wealthy or for young couples with complex business interests. That view is outdated. Seniors entering a second or third marriage or blended families with children from prior relationships, should consider a well-drafted prenup is one of the most practical ways to protect existing assets, honor prior family commitments, and reduce the risk of later conflict.

Prenups Matter in Later-Life and Blended-Family MarriagesWhen people remarry later in life, they typically bring more than affection into the new relationship. They often bring:

• Homes, retirement accounts, and investment portfolios accumulated over decades;
• Children or grandchildren from earlier marriages;
• Existing estate plans designed to benefit those children; 
• Possible disparities in wealth, income, or debt; and
• Disparities in physical and cognitive health and life expectancy. 

Without clear agreements, state marital-property rules can recharacterize separate property as marital property, create elective-share or community-property claims at death, or force unintended divisions upon divorce. A prenuptial agreement allows the couple to define in advance what remains separate, what becomes shared, how appreciation will be treated, and what rights each spouse will have (or waive) at death. This clarity protects the inheritance expectations of children from prior relationships and reduces the likelihood of disputes between a surviving spouse and stepchildren.  For seniors, the stakes are often higher because there is less time to rebuild assets after an unexpected division, and because retirement income streams and long-term-care resources may be at risk.

The Critical Role of a Pre-marital Trust

A prenuptial agreement is valuable, but it is not invulnerable. Prenups can be challenged on grounds of inadequate disclosure, duress, lack of independent counsel, unconscionability, or failure to meet state formalities. Courts sometimes set them aside, partially or entirely. When that happens, the protections the parties thought they had can disappear.  Of course, employing a prenup also requires consent, and agreement of both parties: either a party may refuse or withhold consent even after initial verbal agreement.  

This uncertainty is why a trust established before the marriage remains an important complementary tool, and why it should not be abandoned simply because a prenup is signed.  Property that is validly transferred into a properly structured premarital trust is generally treated as trust property rather than the individual property of either spouse. As a result:

• The assets inside the trust often do not depend on the prenup for protection against division upon divorce.
• The trust’s terms, rather than state marital-property rules, govern disposition.
• Even if a court later invalidates or limits the prenuptial agreement, the premarital trust can continue to shield the assets that were placed in it before the marriage.

In short, the trust provides a layer of protection that does not rest solely on the enforceability of the prenup. The prenup can reinforce the trust by acknowledging the separate character of the trust assets, confirming that neither spouse has a claim against them, and coordinating elective-share or other spousal rights. The trust itself supplies independent substance.

The premarital trust cannot, however, accomplish all objectives that can be obtained by a prenup. In other words, they do not each accomplish precisely the same objectives. Just like a prenup cannot, itself, avoid probate or accomplish other broader estate planning objectives, a premarital trust cannot define spousal support rights, waive elective share or community property claims, allocate responsibility for debts incurred during the marriage, or create binding agreements about the treatment of income and appreciation earned after the wedding. Those matters generally require the contractual framework of a prenuptial agreement. The two tools are complementary: the premarital trust provides strong, independent protection for assets placed in it before the marriage, while the prenup addresses the broader set of marital rights and obligations that a trust alone cannot control.

Practical Coordination

The strongest approach for most seniors and blended families is to use both tools together:

• Establish (or maintain) a premarital trust that holds significant separate assets.

• Execute a carefully negotiated prenuptial agreement that recognizes the trust, waives claims against trust assets, addresses income and appreciation, and coordinates death-time rights.

• Keep beneficiary designations, account titling, and estate-planning documents consistent with both the trust and the prenup.

• Avoid informal transfers or retitling that could inadvertently convert trust or separate property into marital property.

Abandoning a well-designed premarital trust after signing a prenup is usually a mistake. The prenup can be contested; the trust, if properly funded and administered before the marriage, is harder to unwind.

Process is ParamountEnforceability still matters. Full financial disclosure, independent counsel for each party, adequate time for review, and clear, voluntary execution remain essential. A prenup signed under pressure or without transparency is more vulnerable to challenge, precisely the risk that makes the independent protection of a premarital trust so valuable. For seniors entering a second or third marriage, and for anyone with children from prior relationships, the combination of a premarital trust and a thoughtfully drafted prenuptial agreement offers clearer boundaries, stronger protection for intended heirs, and a better chance of preserving both family harmony and financial security. The prenup sets expectations; the premarital trust helps ensure those expectations can still be carried out even if the agreement is later questioned.

When Courts Look Beyond the Paper: A Note Becomes a Gift

In our recent discussion of Estate of Fields, we examined how the Fifth Circuit Court of Appeals disregarded the formal structure of a late-life family limited partnership and pulled the underlying assets back into the decedent’s gross estate. The court looked past the documents to the timing, the retained benefits, and the absence of a genuine nontax purpose. 

A similar lesson emerges from the Tax Court’s decision in Estate of Spenlinhauer v. Commissioner (T.C. Memo. 2025-134, filed December 30, 2025). Together, the two cases reinforce a consistent theme: when intra-family transfers are made late in life, and the transferor continues to enjoy the property, courts will examine substance over form, and the formal paperwork often fails.

The Spenlinhauer Facts- A Very Generous Grandmother

At age 89, Georgia Spenlinhauer transferred her Massachusetts home to her son in exchange for a 30-year promissory note. She continued to live in the house until her death at age 95. No payments were ever made on the note. Near the end of her life the note was amended to raise the interest rate, restart a new 30-year amortization schedule, and add a self-canceling feature that would forgive any remaining balance at her death.

The estate treated the transaction as a sale and excluded the house from the gross estate. The Tax Court disagreed. It held that the full value of the residence was includible under IRC § 2036(a)(1) because Georgia had retained the right to possess and enjoy the property until her death. The note did not qualify as a bona fide sale for adequate and full consideration.

Why the Formal Structure Collapsed

The court applied heightened scrutiny to the intra-family arrangement and found multiple independent failures:

• No payments were made or documented, undermining any claim that a genuine debt existed;
• The self-canceling feature between family members carried a presumption of gift rather than debt;
• The repayment terms were commercially unrealistic, essentially requiring the mother to live well beyond any reasonable life expectancy; and
• Georgia’s uninterrupted occupancy supported an implied agreement that she would continue to enjoy the property.

In short, the transaction lacked economic substance. The note was treated as illusory, and the house remained in the estate.

The Parallel with Fields

Both Fields and Spenlinhauer illustrate the same judicial approach. In Fields, a rapidly formed limited partnership funded in the final weeks of life failed the bona fide-sale test. In Spenlinhauer, a promissory-note sale of a residence coupled with continued occupancy met the same fate. In each case, the court refused to respect the formal labels, partnership interest or installment note, when the practical reality showed retained enjoyment and an absence of arm’s-length dealing.These decisions also echo a broader caution we have raised about late-life planning generally. Transactions undertaken when health is declining, or death is foreseeable, invite closer examination. What might have been sustainable if implemented years earlier with consistent payments, realistic terms, and clear changes in control becomes vulnerable when executed late and administered loosely.Implications for Families and Advisors

Intra-family residential transfers structured as sales for a note, especially self-canceling notes, remain high-risk techniques when the parent continues to live in the home. The IRS and the courts routinely test whether the arrangement is a true sale or merely a disguised gift with retained use. Failure means estate inclusion, potential gift-tax issues, and the costs of controversy, precisely the sort of expensive, family-straining outcome that careful planning seeks to avoid.

More reliable alternatives exist for clients who wish to transfer a residence while retaining the right to live there for a period of years. A properly structured Qualified Personal Residence Trust (QPRT), for example, is a statutory mechanism designed for this purpose. It carries its own technical requirements and risks, but it does not depend on the fiction of a commercial note that no one intends to pay.

The deeper lesson remains consistent with the planning principles we regularly emphasize: substance matters. Courts look beyond the paper. Transfers that leave the transferor in essentially the same practical position as before, continuing to live in the house, receiving no payments, amending terms late in life, will struggle to withstand scrutiny.

For families, the safest course is still early, well-documented planning that produces real changes in ownership and control, accompanied by contemporaneous evidence of legitimate purpose. When those elements are missing, even carefully drafted notes and partnership agreements can be set aside, leaving the estate and the beneficiaries with unexpected tax bills and unanticipated legal expenses, as well as the residue of conflict. Spenlinhauer is a useful companion to Fields in making that point clear.

Thanks to Wealth Strategies Journal for the report and article idea.

   

Ninth Circuit Decision Allows FTC to Directly Levy Trust Assets — A Caution for Asset Protection Planning

On August 4, 2026, the U.S. Court of Appeals for the Ninth Circuit issued a decision that should give pause to anyone relying on  Domestic Asset Protection Trust (DAPT) for asset protection, particularly against federal agency claims. In FTC v. Hoskins, the court held that the Federal Trade Commission (FTC) could execute directly against a Las Vegas residence held in trust to satisfy a $130 million telemarketing-fraud judgment, without first bringing a separate state-law alter-ego action. The ruling represents a significant limitation on traditional asset-protection strategies when the creditor is a federal agency.

The Case

The FTC had obtained a substantial judgment against the debtors. The debtors held a residence in a trust. A Nevada district court blocked the FTC’s collection efforts, citing Nevada’s six-year statute of limitations on judgment enforcement and requiring a separate state-law proceeding to establish that the trust was the debtors’ alter ego.  The FTC appealed.  The Ninth Circuit reversed. 

Key holdings included:

• The Federal Debt Collection Procedures Act (FDCPA) preempts Nevada’s statute of limitations;
• Under the FDCPA, the FTC may levy any property “however held” in which the judgment debtors have a substantial nonexempt interest; and
• Because the debtors were trustees and beneficiaries of the trust, they retained a substantial interest in the residence. No separate alter-ego lawsuit under state law was required.

In short, federal collection procedures overrode state-law protections that asset-protection planners often rely upon.

 Asset Protection Planning Threatened? 

Asset protection planning frequently uses trusts (including irrevocable or discretionary trusts) to create legal separation between an individual and certain assets. State law often protects these trust (or another way to look at it is that these trusts exploit existing state laws) by requiring a creditor to bring an alter-ego, reverse-veil-piercing, or similar action before reaching trust assets. Statutes of limitations can also limit how long a judgment remains enforceable.

FTC v. Hoskins strips away both layers of defense when the creditor is a federal agency enforcing a judgment under the FDCPA. The court treated the debtors’ status as trustees and beneficiaries as sufficient to establish a “substantial nonexempt interest,” allowing direct levy.

This is not a wholesale invalidation of trusts. It is, however, a clear signal that trusts do not provide the same degree of insulation against federal agency collection that they may offer against ordinary private creditors.

Although the decision in the case involved a domestic trust, the reasoning and holding of the case would also apply to offshore trusts.  Its statutory foundation (FDCPA “property however held” and a substantial nonexempt interest) can be applied to interests in overseas trusts. The decision involved a domestic trust holding U.S. real property, however, and the practical obstacles to reaching assets held by an independent trustee in a strong asset-protection jurisdiction remain substantially higher.

For clients concerned about federal agency exposure (FTC, SEC, DOJ, healthcare enforcement, etc.), this reinforces two points:

• Retained interests or control in any trust (domestic or foreign) create vulnerability' and  

• True offshore protection depends far more on the location of the assets and the independence of the foreign trustee than on the formal label of the trust.

As always, outcomes turn on the specific facts, the degree of retained control, the location of the assets, and the willingness of a court to use contempt powers.

This Matters More in Certain Fields

The decision is limited to federal agency collections, but those are precisely the areas where robust asset protection is often most needed. Federal agencies with significant enforcement and collection authority include:

• The Federal Trade Commission (consumer protection and fraud matters);
• The Securities and Exchange Commission (securities and investment-related claims);
• The Department of Justice (various civil and criminal-related recoveries);
• Agencies involved in healthcare enforcement (e.g., matters arising under federal healthcare programs);
• Labor and employment-related federal enforcement; and
• Other financial regulatory bodies.

Professionals and business owners in finance, healthcare services, telemarketing or consumer-facing industries, and other heavily regulated or labor-intensive fields face elevated exposure to federal investigations, civil penalties, and large judgments. In these sectors, the ability of a federal agency to reach trust assets more directly reduces the effectiveness of conventional trust-based planning.

Practical Planning Guide

For clients concerned about potential federal exposure, several points follow:  

• Do Not Assume State-law Barriers Will Hold: Statutes of limitations and alter-ego requirements under state law may be preempted or bypassed when a federal agency collects under the FDCPA.

• Interest in the Trust Matters. Retaining powers as trustee or beneficiary can create the “substantial nonexempt interest” that allows federal levy. More complete separation may be necessary, though complete separation often conflicts with other planning goals (control, tax treatment, or flexibility).  Avoid "comfort clauses."

• Layered Planning Is Paramount:  Trusts are rarely a complete solution on their own. Liability insurance, entity structuring, compliance programs, and careful management of personal guarantees or retained interests continue to play essential roles.

• Jurisdiction and timing matter. This is a Ninth Circuit decision. Other circuits may reach different conclusions, but federal agencies will likely cite it in future collection efforts.

• Early planning is preferable. Once a federal investigation or enforcement action is underway, options narrow significantly. Proactive structuring, while still subject to fraudulent-transfer and other limits, is generally more effective than reactive moves.

 Conclusion

FTC v. Hoskins does not mean asset protection trusts trusts are useless. It does mean that asset-protection strategies built primarily on state-law formalities face a meaningful vulnerability when the creditor is a federal agency armed with the FDCPA. For clients in higher-risk industries, such as  finance, healthcare, consumer services, and similar fields, this decision reinforces the need for realistic expectations and multi-layered planning rather than reliance on any single technique.

As always, the appropriate structure depends on the individual’s circumstances, risk profile, and overall estate and business planning goals. Clients with potential federal exposure should review existing arrangements with counsel familiar with both asset-protection principles and federal collection procedures.

Source: Ninth Circuit decision in FTC v. Hoskins (Aug. 4, 2026), as reported in the Wealth Strategies Journal Daily Update of August 11, 2026.