A Medicaid trust can help you qualify for Medicaid while preserving your estate. But they're complicated, and you need to know the kinds of trusts available, and how they work.
Medicaid trusts fall into the general categories of revocable and irrevocable trusts. Most elder lawyers are partial to irrevocable trusts because they can't be changed after they've been created. They're drafted so that income is payable to you — the creator — to use for your living expenses for your life. The principal is inherited by your heirs — it's protected. Any income — pensions or Social Security, for example — goes to the nursing home.
A revocable trust can be changed or rescinded by the person who created it. What's more, the funds that make up the trust are countable assets in determining Medicaid eligibility and therefore of no use in Medicaid planning.
There's a five-year look-back period after which trust assets are exempt from being applied toward long-term care. You cannot have recently transferred assets so that you move into a nursing home on Monday, give all your money to your children Tuesday and qualify for Medicaid on Wednesday.
Among types of Medicaid trusts that serve as devices for protecting assets are:
Trusts are useful but complicated instruments that can help you with long-term money management issues. Give us a call and we'll help you decide whether a trust is right for you, and how we can work together to set one up.
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