Throughout your lifetime, you will accumulate assets and financial resources to provide a safety net during challenging times. It is important to consider the potential impact of long-term care on your assets and the ability to pass them on to your chosen heirs. In such situations, the assets you have worked hard to accumulate can be rapidly depleted to cover the costs of care. Although this may seem unjust, there are steps you can take to safeguard your assets, such as establishing a Medicaid trust.
What Is a Medicaid Trust?
A Medicaid Asset Protection Trust (MAPT) is a form of estate planning that allows individuals to safeguard their assets while ensuring eligibility for long-term care through Medicaid. Establishing a Medicaid trust should be done with ample time to ensure its effectiveness, and it involves adhering to certain regulations that may necessitate making some serious decisions. Seeking the guidance of a qualified elder law attorney at Miller Law PC is the most reliable approach to developing a Medicaid trust that is solid and withstands thorough examination.
Why You Would Want to Create a Medicaid Trust
There are numerous factors to consider when establishing a Medicaid trust, with protecting your assets being the primary motivation. It is difficult to predict whether or not you will require long-term care in the future, and it can be quite costly. Nursing homes typically require individuals to provide assets as payment assurance. However, if an individual possesses significant assets, Medicaid may not cover their care until those assets are exhausted. This situation may imply that the individual must endure the challenging experience of witnessing their assets being depleted to cover their care expenses, potentially leading to financial hardship.
Establishing a Medicare trust can effectively safeguard your estate from being sold or liquidated to cover your care expenses. This prudent step ensures that your assets remain intact and secure. However, before you can execute your trust, you need to have a solid understanding of how it operates.
The Basics of a Medicaid Trust
For a Medicaid trust to be effective, it has to have been in place for at least five years before you need Medicaid. There is a five-year lookback period for ownership, and if the transfer to the trust was less than five years ago, you won't qualify for long-term care.
The trust has to be irrevocable, with all the assets in the trust in the control of the trustee. Legally, you no longer have control of the assets in the trust because they're now owned by the trust. Your net worth decreases due to the fact you no longer have ownership, making you eligible for Medicaid as long as your income qualifies you.
Some rules allow your heirs to take control of your assets, such as your home. For example, if you have a child living with you and giving you care, the home can be transferred to their ownership without penalty.
Discussing these issues with an elder law attorney at Miller Law Firm PC will help you define the best course of action with a Medicare trust.
Protecting Your Assets With a Trust When You Need Long-Term Care
You've worked hard to gain what you own, but it can be challenging to determine if you have sufficient funds to cover the unanticipated expenses of long-term medical care. Medicaid is a highly effective solution to address the issue at hand. It is crucial to ensure, however, that your estate is properly managed and prepared in order to meet the eligibility requirements when the time arises. This enables you to receive the long-term medical care you may need while still being able to pass on your estate to your heirs.
Getting Help From a Qualified Estate Planning Attorney
Forming a Medicaid trust is an involved process that comes with careful considerations and hard decisions. Discussing the need for a Medicaid trust with an elder law attorney helps you gain an understanding of the process, how it works, and what you need to do in order for the trust to be effective.
Planning your estate requires care and diligence to ensure that you receive the care you need, that all of your wishes are respected, and that your heirs get what you intend them to have. Steven Miller at Miller Law Firm PC in Pennsylvania can provide you with the guidance you need to help you decide. Give Miller Law Firm PC a call today at 855-936-3886 to set up a consultation and get the process started.