When it comes to estate planning, there are options for everyone. While this means every situation can be covered, it also means it can be a challenge to choose the right type for your situation.
Today, we want to help you understand what’s covered in a Medicaid Asset Protection Trust and why it’s a popular choice for families trying to plan ahead in the event you need long-term care through Medicaid.
What is a Medicaid Asset Protection Trust?
This type of irrevocable trust ensures you have protection for your assets and allows you to qualify for the benefits of Medicaid long-term care. Essentially, you will transfer assets into this type of trust to exempt them from consideration in Medicaid eligibility.
The benefits of this are obvious and work two-fold: you get to start an effective and efficient estate plan while also increasing your chances of being approved for Medicaid in the future.
Time is of the essence
There is a major time factor at play with Medicaid trusts. There are multiple windows you must consider for this trust:
To exempt assets from consideration for Medicaid home care coverage, assets must be in the trust at least two and a half years beforehand
To exempt assets from consideration for Medicaid home care coverage, assets must be in the trust five years beforehand
This is why we always advise clients to start their plan sooner rather than later. The difference of a few months could cost you thousands in the long run. Daily care without Medicaid could cost you $400 or more a day!
Stay in YOUR home
There is also no restriction to the type of assets you can place into these trusts. That means you could protect your home from being considered in Medicaid eligibility, and you won’t have to further protect your home from risk should your assets be depleted in securing long-term care. It’s important to know the sale of a home placed in these trusts will count against your eligibility for Medicaid, so you should be willing to commit long-term to have the home remain in the trust and in the family.
Ultimately, these trusts can provide you with peace of mind and familiarity at a scary time when long-term care needs arise.
Additional flexibility
Like other trusts, a Medicaid Trust will avoid probate. But they have additional options some trusts don’t which include the ability to hold assets from multiple jurisdictions (important for those who own property in multiple states or municipalities), safeguards for special needs beneficiaries, and ease of management.
Even if assets can be transferred into your Medicaid Trust, it’s important to have a long-term plan before doing so. You should know who will be managing or handling the assets in the future before placing them in the trust.
The best way to determine which trust best fits your needs is to work closely with an estate planning lawyer. At Miller Law, we understand the importance of having a plan and strive to help seniors pay for long-term care without going broke. Contact us today to start your plan!