A Medicaid trust is a trust that is created in order to protect assets while making sure those assets do not disqualify you from Medicaid coverage. There are actually a few different options when it comes to Medicaid trusts. You can make an irrevocable trust if you are worried about needing Medicaid for nursing home care or for other expenses as you age. You can also make a very specific kind of trust, called a special needs trust, if you have a disabled loved one and you want to provide financially for that person without putting his or her Medicaid and Supplemental Security Income at risk.
Nirenstein, Horowitz & Associates understands the rules for wills and trusts and we know what the options are under Connecticut law for making a Medicaid trust. To get help creating a trust that will provide you or your loved one with the peace-of-mind of knowing Medicaid benefits are available without the loss of assets, give us a call today.
How Does a Medicaid Trust Work?
To understand how a Medicaid trust works, you must understand how Medicaid works. Medicaid is a means-tested government insurance program which pays for things that most insurance (including Medicare) won’t cover. For example, except for people who need skilled care for a short duration, most patients who need nursing home care are not going to be able to get their private insurance or Medicare to cover them. Medicaid is the only option for getting nursing home care if patients don’t want to pay thousands of dollars a month in bills out of their own pocket.
Medicaid not only provides coverage for seniors who need nursing home care, but also offers coverage to other people who have limited resources and who may have high medical needs. One example is someone who is severely disabled and cannot work. The disabled individual would be able to get Medicaid to pay for care costs… provided countable income and resources are not too high.
The problem is, Medicaid sets resource limits very low. If you have acquired assets over the course of your life, you will not be able to qualify for Medicaid. You could be forced to spend down your nest egg to pay your medical or nursing home bills. You could even be forced to sell some types of real property.
Only after your savings is gone and your property is sold will you come down to the limits for Medicaid coverage. Likewise, if a person with a disability received a gift or inheritance, his or her Medicaid benefits could be stopped until the gift or inheritance was spent down and the value of that gift no longer put the disabled person over the allowable resource limit.
A Medicaid trust aims to make sure that there are no countable assets which affect Medicaid qualification. Instead of having to sell assets or being forced to spend personal wealth on care, the assets are put into the trust. Having the assets in this type of trust could also affect Medicaid estate recovery, which is a process used by the state to recoup funds paid out for care under certain situations. Depending upon the type of trust created, the assets within it could be safe from Medicaid estate recovery so the wealth protected by the trust could serve as a legacy after death.
How Does a Medicaid Trust Actually Work?
A Medicaid trust works by making the trust the owner of the assets you are trying to save. You need to create a trust document so that a legally valid trust comes into existence. You then need to transfer ownership of assets to that trust so you no longer own the assets. If the trust is for a disabled person, the individual making a gift to the person with the disability would also put assets into a trust, rather than giving them directly to the disabled individual.
Proper legal formalities must be followed in trust creation and funding. The right kind of trust must also be selected. It is best to get legal help from an experienced attorney to make certain you have used the right kind of trust and to make sure you have done what you needed so the trust can provide desired protections.
Getting Help from A Connecticut Medicaid Trust Lawyer
To find out more about how a Medicaid trust works, join us for a free seminar. You can also give us a call at 860-548-1000 or contact us online to speak with an attorney at Nirenstein, Horowitz & Associates who can provide you with personalized advice on your Medicaid trust.