Medicaid Asset Protection Trust
Long-term care insurance is the preferred option for protecting assets from nursing home costs, since it helps keep clients out of the nursing home – by paying for home care. Many clients over the years who were forced to spend their final days in a facility simply because they ran out of money to pay for home health aides. Additionally, for married couples, the home care option may protect the spouse from compromising their own health and finances with heavy burden of caregiving in their later years.
When the client is turned down for long-term care insurance, or is unable to afford the premium, the next best option is the Medicaid Asset Protection Trust (MAPT). Making assets joint with adult children offers no protection since Medicaid considers all of the jointly held assets to be available for the care of the ill parent, except to the extent the child can prove the amount of their actual contribution. Additionally, outright transfers to children are generally inadvisable since those assets then become exposed to the children’s debts and liabilities, divorces, etc. In addition, some children spend the money, refuse to give it back when needed or die before the parent and pass those assets on to their heirs. Once exception to the inadvisability of outright transfers to children is when nursing facility care is imminent or at least foreseeable. In such case, the assistance of an elder law attorney is essential since the amounts to be transferred, the order of assets transferred and where to transfer the assets all require the advice of counsel. The object here would be to protect as much of the assets as possible and to qualify for Medicaid benefits at the earliest possible moment. If someone is just getting older, cannot or will not get long-term care insurance and want to plan ahead to protect their assets, the best option is to set up a Medicaid Asset Protection Trust.
Known as the “income only” trust, the MAPT names someone other than you or your spouse as the trustee, usually one or more adult children, and limits you to the income. The principal must be unavailable in order or it to be protected. These trusts are ideal for the family home as well as for assets the client is only taking the income from or is simply reinvesting. The client’s lifestyle is not generally affected since they continue to receive their pension and Social Security check directly, they keep the exclusive right to use and occupy the home and they preserve all the tax exemptions on the home. The trust may sell and trade assets through the trustee. Nevertheless, the parent retains some measure of control by reserving the right to change the trustee in the event of dissatisfaction for any reason.
The Medicaid Asset Protection Trust is also flexible. You may sell the home, the money is paid to the trust, and the trust may buy a condominium, for example, in the name of the trust so it is still protected. The trust may buy and sell and trade stocks and other assets. IRA’s and other qualified plans stay out of the trust since the principal of all such retirement plans are exempt from Medicaid. These types of assets avoid probate as they go directly to the designated beneficiaries at death.
Contact the Law Offices of Justin M. Gilbert today to begin Medicaid planning today.
What Is Elder Law?
So, what is elder law? Elder law encompasses many areas. We offer a wide range of services tailored specifically to advise and protect elders. Unfortunately, the elder population have become targets for crime and fraud in recent years. Extra protection is essential in a time when crimes against the elderly are rising at an alarming rate. We are passionate about making sure you and your loved ones get the financial protection you deserve.
Justin M. Gilbert has experience advising clients on a range of elder law issues. We assist clients with:
- Long-term care and disability planning
- Qualifying for Medicaid Benefits
- Avoiding Medicaid Recovery
- Asset protection
- Veterans aid & attendance benefits
- Many other legal issues associated with growing older.
Our firm has experience with asset preservation techniques in connection with long-term care planning. Where appropriate, we use special alternatives to help families “spend down” in order to accelerate eligibility for Medicaid, where appropriate. In many cases, these alternatives enable seniors and their families to retain significant assets while simultaneously qualifying for Medicaid nursing home care. In short, we can help you and your family avoid going broke and yet still preserve dignity when dealing with long-term nursing home care.
If your loved one is a veteran with large out-of-pocket care costs, we may also be able to help the veteran or spouse qualify for a monthly pension from the government. This may be possible even if the disability is unrelated to wartime injury. This monthly pension may make all the difference in extending the ability of the veteran or spouse to remain at home or in an assisted living facility.
The first step towards protecting yourself or an elderly loved one is understanding potential vulnerabilities and knowing the answer to the question, “what is elder law?” Now that you have an idea, take the next step and contact our office. Justin looks forward to the opportunity to work closely with you and your loved ones to ensure your financial future is planned.