Moving into a long-term care facility such as a nursing home or hospice can drain a person’s finances. One potential option for avoiding this is to create a Trust. This can help limit one’s financial vulnerability before it is time to move into a nursing home. A Trust can transfer control over physical property for a Trustee to use it for the stated purpose. Usually, this is to provide income for the Trust maker.
If you wish to limit financial vulnerability before moving into assisted living care, work with a Cary Medicaid Trust lawyer. Our dedicated attorneys could provide crucial information on using these estate planning tools to your benefit.
Living in a nursing home can costs thousands of dollars every month. To cover these costs, many people must sell their homes or rely on relatives for support. However, Medicaid can now cover a significant portion of these costs if a Cary resident is unable to do so themselves.
To see if you qualify, Medicaid will evaluate your finances. Simply owning a home in your name will appear in their searches and disqualify you for coverage. Sadly, this can cause a family to lose all their assets to cover the costs of a loved one’s nursing care.
Thankfully, there are other options for families who must pay for their loved one’s nursing care. Qualification for Medicaid may still be possible if a party does not have significant assets in their name. A common way to transfer assets out of one’s name but still reap some benefits is to place them in an Irrevocable Trust.
An Irrevocable Trust transfers ownership of an asset to another party. The terms of the Trust may state that the party must use those assets for a specific purpose, such as to care for an elderly relative. Because this Trust is irrevocable, meaning unchangeable, the law now no longer considers those assets to be the property of the original owner. This means that Medicaid will not view these assets when determining eligibility for assisted living care.
Still, this is not a foolproof method. In 2005, Congress passed the Deficit Reduction Act which served to amend section 1917(c)(1)(B)(i) of the Social Security Act. Previously, Medicaid would consider the transfer of property in the past 36 months, or three years, when counting an individual’s assets. Now, this lookback period lasts for 60 months, or five years. As a result, it is critical to contact a nearby Medicaid Trust lawyer as soon as possible to ensure that you meet these requirements.
Learning that you or a loved one needs nursing home care can be a devastating financial blow. Unfortunately, while many people can qualify for Medicaid assistance when seeking long term care, simply owning a home could disqualify you.
Even so, it is possible to avoid this fate if you act quickly. Creating an Irrevocable Trust to transfer property out of a person’s control can be a useful solution in many situations. These Trusts allow a person to receive the benefit of assets without having direct ownership. Contact a Cary Medicaid Trust lawyer today to gain valuable insight on what estate planning tools may be beneficial in your circumstances.