How an ATP can help you prepare for long term care

On Behalf of | Apr 30, 2020 | Estate Planning |

Long term care is expensive in New York, and many people will require LTC in their later years. It is important that workers approaching retirement think about their financial plans for LTC. Medicaid can help ease the financial burden, but it can be difficult to qualify for medicaid. As outlined by the American Council on Aging, New York offers several different pathways to medicaid eligibility; however, they all include income and asset limits.

Fortunately, there are ways to protect assets while seeking eligibility for medicaid.

New York asset limitations for medicaid eligibility

A single person looking to qualify for institutional/nursing home medicaid would need to meet an income limit of $875 per month and an asset limit of $15,750. This range goes up if a married couple is jointly looking to apply. The income limit then increases to $1,284 per month with an asset limit of $23,100. If only one married partner needs to apply for medicaid, the limits for the applicant are the same as a single, but there is also an asset limit of $128,640 placed on the spouse. Medicaid counts any income from any source, but there are a number for asset exemptions including IRAs, 401ks, a primary residence, a vehicle, and a number of others.

The benefits of an asset protection trust

If someone needs medicaid to help pay for LTC but their assets are over the limit, it may be beneficial to look into an ATP. According to Investopedia, ATPs “offer the strongest protection you can find from creditors, lawsuits, or any judgments against your estate.” An ATP will help preserve the assets while transferring them out of the name of the medicaid applicant. An ATP is a more complicated kind of trust and not the only option for protecting assets.