If You Want to Protect Your Assets from Nursing Home Costs, You’ll Need More Than a Living Trust

Living trusts are an excellent tool for accomplishing several estate planning goals. However, if you are hoping to protect your assets from nursing home costs, you will need more than a living trust.

Because these trusts are revocable and the person setting up the trust can use the funds any way they wish, the assets are still considered to belong to that person. Assets in your living trust will probably be significant enough to prevent you from qualifying for Medicaid long-term care benefits.

However, certain types of trusts can protect your assets while enabling you to establish Medicaid eligibility.

Long-Term Care Benefits

The long-term care benefits offered through Medicaid can provide a valuable resource for individuals who need care. Even families with significant assets find that the cost of nursing homes can empty their bank accounts in a hurry. Medicaid benefits can pay for care in a nursing home or care within the home.

However, an individual must have minimal assets and very little income to qualify. Many people think they have no choice but to spend everything they have on care, and then when they’re broke, they can sign up for Medicaid.

Estate planning attorneys know there are options that, with careful planning, can enable families to conserve assets while still establishing Medicaid eligibility. The best plans usually involve many strategies woven together. One strategy could be to create a special purpose irrevocable trust.

Trusts That Meet Medicaid Rules

Most of the time, if an individual transfers funds into a trust but also remains a beneficiary, the assets in that trust are considered to belong to that individual. However, the rules make an exception for certain types of irrevocable trusts.

When a trust is irrevocable, the person who transfers funds into the trust cannot take them back or change the terms of the trust. This contrasts with a revocable living trust, where its creator can do whatever they want with the assets. So at the very least, a trust must be irrevocable to help protect assets from nursing home costs.

Planning Ahead Gives You More Options

The government uses a five-year look-back period when assessing the financial situation of a Medicaid applicant. That means you must transfer assets into a trust at least five years before you anticipate needing long-term care.

Of course, emergencies can strike at any time, and the asset protection team at Casey Lundregan Burns, P.C., can help with plans to protect assets at any stage in the process, even if long term care is required immediately. However, the earlier you begin planning, the greater the options available for conserving and making the best use of assets.

For some families, a Medicaid Planning Trust is a beneficial component of an asset protection plan. In other situations, our legal team might advise a different type of trust or other options.

Work with the Attorneys Who Are Dedicated to Protecting Your Hard-Earned Money

Preserving your hard-earned resources for yourself and future generations is our top priority at Casey Lundregan Burns, P.C. For over 90 years, we have been dedicated to this mission, and we plan to continue our focus for at least another 90 years. Contact us today to explore the most effective options for safeguarding your assets from nursing home costs.