Co-authored by Joanna C. Feldman
A Medicaid Trust is often used when planning for the future and contemplating the fact that one might eventually need nursing home care. The average monthly cost of a nursing home in our area exceeds $12,000.00, and there are only four ways to pay for such care: privately (which can be cost-prohibitive), long-term care insurance (which can be expensive, unavailable, or inadequate), Medicare (which only pays for a maximum of 100 days), and Medicaid. Medicaid has become the primary payor of nursing home costs and the Medicaid Trust is a useful planning technique to create Medicaid eligibility.
At the time one applies for Medicaid, one cannot have more than $15,150.00 (in 2018) in available assets. To plan for that day and to protect at least some assets, the transferring of assets must occur at least five years before one needs Medicaid. Transferring outright to children or other loved ones is generally not recommended because of a variety of reasons. The safer plan is to use a Medicaid Trust. Assets within a Medicaid Trust are no longer considered available for Medicaid eligibility purposes.
Most of our clients will transfer their home to the Medicaid Trust, as it’s often their largest asset. Others will transfer more liquid assets, such as bank accounts and stock and brokerage accounts (but not IRAs, as they are not counted as available assets). We will never advise one to transfer all of their liquid assets to a Medicaid Trust for various reasons. How much to put into the Trust is a personal decision that depends on a variety of factors, such as how much money one has, how much money one wishes to have available, and whether one relies on savings to cover monthly expenses.
Planning for the future can be complicated, but an elder law, estate planning, and special needs planning attorney can help by offering advice based on the law, the client’s specific circumstances, and the attorney’s professional experience. We can be reached at 914-925-1010 or by e-mail at email@example.com. You are also encouraged to visit our website at www.plantodayfortomorrow.com. Questions may be submitted to firstname.lastname@example.org for a response.