6 Steps To Protecting Your Assets From Nursing Home Care Costs
An irrevocable trust allows you to avoid giving away or spending your assets in order to qualify for Medicaid. Assets placed in an irrevocable trust are no longer legally yours, and you must name an independent trustee.
Set up properly, an irrevocable Medicaid trust protects your assets from a Medicaid spend down. It allows you to qualify for long-term care at the same time. It also means your assets can pass down to your spouse and children when you die.
The Truth: The State takes nothing. Medicaid simply will not pay anything until you “spend down” all of your available or “countable” assets. If you are single or your spouse is also in a nursing home, you would have to spend down to $2,000 or less in cash or other countable assets.
A revocable living trust will not protect your assets from a nursing home. This is because the assets in a revocable trust are still under the control of the owner. To shield your assets from the spend-down before you qualify for Medicaid, you will need to create an irrevocable trust.
When you apply for Medicaid, any gifts or transfers of assets made within five years (60 months) of the date of application are subject to penalties. Any gifts or transfers of assets made greater than 5 years of the date of application are not subject to penalties. Hence the five-year look back period.
Yes, your spouse can keep a minimal amount of assets. This figure varies by state, but in most states, the spouse entering the nursing home can keep $2,000 in assets.
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If you eventually need nursing home care, any income streams you receive from your pension, deferred compensation, or other plan, will go to the nursing facility. ... Taking a lump sum from a pension allows it to be treated as an asset that you can transfer to a protective trust structure.
Nursing homes may offer resident trust funds into which patients can deposit their pension checks, Social Security checks, and other monies. The problem is that unscrupulous nursing home employees can potentially steal from these accounts—and they have.
A nursing home can't “go after” a person's home or other assets. The way it works is that when a person goes into a nursing home they have to find a way to pay for the cost of their care. ... But Medicaid requires that a person only have limited income and assets before it will start to pay for care.
Medicaid is one of the most common ways to pay for a nursing home when you have no money available. Even if you have had too much money to qualify for Medicaid in the past, you may find that you are eligible for Medicaid nursing home care because the income limits are higher for this purpose.
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