Many of us will need to move into a nursing home at some point in our later years. The costs of this move can be prohibitive and may endanger the inheritance of heirs and other family members. Thankfully, it is possible to obtain help in this area through Medicaid. Still, this program is available only to those who meet the financial eligibility standards. Owning a home is perhaps the clearest example of a situation where the sale of assets may be necessary to obtain benefits. However, proper estate planning with a skilled elder law attorney could help keep your home in the family while qualifying you for Medicaid. Establishing a Qualified Personal Residence Trust in Wake Forest may be critical to ensuring that you have the funds you need for your assisted living care in the future.
Medicaid helps to cover some or all of the costs involved in seeking long-term care from a nursing home. However, this is only possible if a person has no other means of paying for this care. A home is considered an asset that could be sold to raise funds for nursing home care. However, effective estate planning can help keep a family home without impacting Medicaid eligibility. A Qualified Personal Residence Trust is a way of taking the home out of the owner’s hands so that it is not considered when calculating eligibility for Medicaid. Upon creation of a Trust, the property that goes into the Trust is no longer an asset of a Trust maker. This means that placing a family home into a Qualified Personal Residence Trust makes it immune from valuation.
However, Medicaid recognized that parties were making quick sales or transfers of homes to take advantage of this concept. In response, Congress passed a five-year lookback period under section 1917(c)(1)(B)(i) of the Social Security Act. This means that the creation of the Trust must occur at least five years before a party files an application for Medicaid. Contacting a dedicated local attorney today is critical to take advantage of the benefits of Qualified Personal Residence Trusts.
During the creation of a normal Trust, the party placing the property into the Trust immediately loses all rights to that property. This would mean that the Trust maker must move out of a house placed in a Trust. However, Qualified Personal Residence Trusts make special provisions to avoid this outcome. In these situations, a Trust maker retains the right to live on the property for a set period of time. Usually, this involves staying on the property rent-free, and the exact terms of the Trust are up to the parties to determine. In this way, a Qualified Personal Residence Trust can serve as a way to allow a person to remain in their house while planning for an eventual move into a nursing home or other living arrangement.
Wake Forest residents who own homes should consider how their finances and assets will affect their Medicaid eligibility in the future. It is important to consider the eventual need for medical care, long-term assisted living, and all the associated expenses. The forced sale of a home to pay medical bills is never a desirable outcome. Thankfully, a properly formatted and timed Qualified Personal Residence Trust in Wake Forest can provide financial stability and help you qualify for Medicaid. However, this option is most effective the sooner you begin planning, so contact a knowledgeable attorney at our firm today to discuss your situation.