Table of Content
- Creating an Irrevocable Trust
- Options To Protect Assets From Nursing Home Costs
- How Can I Protect My Assets from Healthcare Expenses?
- CONTACT US TODAY FOR A CONSULTATION
- Does a Living Trust Protect Assets from Nursing Home Costs?
- When Can a Trustee Withdraw Money From an Irrevocable Trust?
- Will Medicaid take my money to pay for my nursing home care costs?
If you are a Medicaid beneficiary, the state may attempt to recoup payments for certain expenses after you pass away, including long-term care facility costs. However, Medicaid will not try to recoup payments if you leave behind a spouse, a child under 21 years of age, or a child who is disabled or blind. A properly set up irrevocable Medicaid trust can help protect you from Medicaid estate recovery. An irrevocable trust is a type of trust with terms that cannot be amended, modified or terminated without the permission of the trustor’s named beneficiaries. This differs from a revocable trust which can be modified or cancelled at any time by the trustor.
However, to mitigate this scenario, ensure the appropriate amount is included in the trust. You can look up the average cost of a funeral to get an idea. It is important that you and your spouse understand the advantages and disadvantages of each alternative. Moreover, it is also important your children, family members, or other important beneficiaries are present or in the loop as to the plan.
Creating an Irrevocable Trust
With an irrevocable trust, however, the trust becomes a separate entity from you. As outlined in the terms of the trust, you do not have control over them. Therefore, if you need nursing home services, the assets within the trust are not included in any Medicaid eligibility computations. Typically, Medicaid has been the payer of most skilled nursing and custodial care. It will pay these costs once you meet a certain monetary, personal asset threshold.
Auld Brothers Law Group has experienced Elder Law attorneys in Pittsburgh who can help protect your assets from medical care expenses. Here at JacksonWhite Law, we will thoroughly discuss your situation and learn about your financial situation, including any income or assets you may have. We will also do our best to help you understand your options. Get in touch with us now learn more about irrevocable trusts and for assistance getting the long-term care you need. Irrevocable trusts created after 1993 may contain assets that are considered a countable resource by Medicaid.
Options To Protect Assets From Nursing Home Costs
Medicaid requires a person to have little income and few assets to qualify which could cause a living trust to interfere. When determining if assets are safe from Medicaid in an irrevocable trust, you must know whether the trustee is authorized to give any assets to the beneficiary. If the trustee is authorized to transfer resources to a beneficiary or spouse from the trust, Medicaid will count that portion as available to the individual. The reason for this is that Medicaid assumes that the trustee will exercise discretion and distribute the allowable assets if the person who created the trust must enter a long-term care facility. Even if you have money available, the monthly expenses add up. Without assistance from government programs or insurance, money can quickly run out.
Some people look to trusts as a way to accomplish this goal. You need to understand the difference between a revocable and an irrevocable trust. If your income is above the threshold for Medicaid and you want to protect assets from the nursing home, you need to talk to an estate attorney in San Jose CA today to learn what rights you have under the law. We have decades of experience helping people just like you protect their assets should they need long-term care at some point in their lives. When a person passes away, the irrevocable family trust will also protect their assets from Medicaid Estate Recovery, which is essentially the government going after their assets to pay back what they paid for them. Since the assets are no longer in their name in an irrevocable trust, there is nothing for Medicaid to go after.
How Can I Protect My Assets from Healthcare Expenses?
A living trust may be used as a way to handle one’s estate, while also providing clear instructions on how assets should be disbursed after death. Living trusts allow trustors to maintain greater control of their assets as this type of trust is able to be changed, modified or terminated while the trustor is still alive. Assets in a living trust may include real estate, bank accounts, investments, valuable possessions, and other belongings. When you or your spouse pass away, any assets put into an irrevocable trust are not included in the estate for the calculation of Medicaid recovery, the estate tax, or probate. The trick is to turn your countable assets into non-countable assets.
Our goal is to provide you with clear, straightforward information to help you understand what you need. Discuss your situation with an elder law attorney to determine which choice is right for you. Covering long-term medical expenses can be overwhelming, especially when you don’t want to lose your life’s savings to pay for the care. Many people ask the question, “Can a nursing home take money from a Living Trust? ” The answer depends on if you have an Irrevocable or Revocable Living Trust.
CONTACT US TODAY FOR A CONSULTATION
After a five-year period (a 30-month period in California), transferred assets will no longer subject you to penalties or delayed eligibility for Medicaid's long-term care benefits. For obvious reasons, many people want to preserve their assets for their spouse, children, or future generations. The primary purpose of an Irrevocable Living Trust is that it allows you to protect all assets within the Trust from being used to pay for any long-term medical costs. Your estate receives excess funds not used on your funeral. They don’t go to a beneficiary like the trust we described earlier.
Establishing an irrevocable trust prevents you from having to give up your assets to qualify for Medicaid. When assets are placed in an irrevocable trust, they are no longer legally yours and instead are transferred into the name of your chosen trustee. The trust arrangement can then state who you would like to have your assets after your death.
The Mattar Firm offers a trust that not only lets you protect your assets but also, controls them. You get to have the best of both worlds with the Irrevocable Pure Grantor Trust. Gone are the days when you would have to file a different tax return with your trust. This is no longer necessary when you have the proper Asset Protection Trust. The costs of nursing home care are expensive, and most people cannot sustain paying privately for very long.
Well, many people think Medicare or their health insurance carrier will pay for nursing home or assisted living services. These programs will not pay for these services – known as custodial or skilled nursing care. Probably because there is such a trust — an irrevocable trust.
Legacy Law Group was founded in 2000 on the belief that effective legal counsel is attentive, experienced, and focused on the unique needs of each client. Not everything you own will necessarily count towards your Medicaid eligibility for long-term care. It is important to understand what does and does not count.
If you’re planning ahead and have over five years before you would need assistance, then you can discuss the option of using an Irrevocable Trust to lower your overall assets to help with your eligibility. If the assets in a trust are not countable, you may face a Medicaid transfer penalty. This penalty is essentially a punishment for transferring assets out of your name to a location where it cannot be counted.
While that may not seem like a lot to you, in our experience, it becomes a lot when a family is facing payment of nursing home services and want to protect something for the remaining family members. However, we work with a carrier that utilizes an estate planning trust. This is an irrevocable trust in which you can protect up to $100,000 of your savings and assets.
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