In order to be eligible for Medicaid, applicants have to be below a specific asset limit. While the asset limit does not count the value of things like your primary residence or car, many applicants still find themselves above the asset limit to qualify and below the financial ability to pay for their own coverage. In order to get Medicaid and receive the medical care they need, applicants will often use some strategies to lower their counted assets - including Medicaid Asset Protection Trusts.
A Trust is a fund that is created by you for the purpose of being passed along to someone else after you pass away. Unlike a Will or other forms of Estate Planning, you can continue funding a Trust throughout your life, like you would a savings account. There are many different types of Trusts, but not all of them would help someone accomplish their Medicaid goals. For that, they will have to create a Medicaid Asset Protection Trust.
A Medicaid Asset Protection Trust is a Trust created expressly to place assets into to avoid the Medicaid asset limit. These assets could include money or other things you own, like property or a business. After you place assets in a Trust, they no longer legally belong to you. You can place them in with the intention that they will be passed along after your death, and continue to use them yourself until that moment.
Transferring assets without a Trust is often a tricky situation for Medicaid applicants. If you transfer your assets to a family member within five years of needing to enter a nursing home, you will be denied Medicaid coverage. Furthermore, if you do transfer your assets to a family member, you become vulnerable to the family member’s financial issues or divorce losing the asset in question. Accordingly, a Medicaid Asset Protection Trust is the safest way to pass along assets to your loved ones.
Medicaid Asset Protection Trusts work swimmingly as long as you have planned for them well in advance. The golden rule in receiving Medicaid is having everything in place at least five years prior to needing it. Accordingly, your Medicaid Asset Protection Trust will not exempt your assets if it is created within five years of the time you apply for Medicaid. The Trust is a wonderful solution, but you must plan for it and create it well in advance.
At Miller Law Firm PC, we have lots of experience dealing with Medicaid Asset Protection Trusts. If you are ready to start planning for Medicaid, don’t wait! Contact Miller Law Firm PC today to get started. We can help you protect your loved ones and your own legacy by planning for the future.
