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How a Medicaid trust can help protect your assets

On Behalf of | Jan 10, 2023 | Long-Term Care Planning

Long-term care can get pretty expensive. You may be looking at tens of thousands of dollars or more every year, and if you are not well prepared, the high cost of assisted living could deplete your savings and assets. Fortunately, programs like Medicaid can help meet the costs associated with long-term care, but only if you are eligible.

Medicaid eligibility is pegged on two things: your income and assets. You may be ineligible for Medicaid if you have accumulated substantial savings or assets over time and are over the limit unless you spend down or give away some of them. However, there is another way around it.

Medicaid trusts explained

Instead of spending down or giving away your hard-earned money and assets to become eligible for Medicaid, you can set up a Medicaid trust. Here is how these kinds of trusts work.

When you create a Medicaid trust and move assets into it, they are no longer considered part of your estate. Therefore, these assets will not count when assessing your eligibility, and you do not have to spend down to achieve the Medicaid cap.

In addition, Medicaid trusts are irrevocable. The terms of the trust cannot be changed once created, and assets cannot be sold, taken out of the trust or transferred to third parties. The asset protection capabilities of Medicaid trusts could help protect your financial interests even when you are not physically or mentally able.

Do not wait until it’s too late

Most people put off planning for long-term care until it is too late to implement effective strategies. Do not be one of them. Consider reaching out for expert guidance when planning for such eventualities to avoid unnecessary issues when the time comes.


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