When you need assistance under Medicaid, including for long-term nursing care, you may face obstacles due to the asset limit imposed by the federal program. Elderly people in New York applying for Medicaid coverage for long-term care typically face an asset limit of $2,000, although certain types of assets may be exempt, including a vehicle, primary residence and some personal possessions like wedding rings. However, many people cannot pay for costly long-term nursing care but still exceed the asset limit, forcing them to “spend down” their assets to get the care they need. A Medicaid planning strategy like a Medicaid Asset Protection Trust may be another option to help people access long-term nursing care.
Protecting assets through Medicaid planning
A Medicaid Asset Protection Trust is created by the grantor, the individual who plans to apply for Medicaid coverage in the future. The grantor transfers their assets to the trust and names a trustee, who will manage the assets in the trust. While the grantor may not serve as trustee, other trusted family members, such as adult children, may fulfill this role. In addition, the trust has a beneficiary, who will receive the contents of the trust after the grantor passes away.
Advance planning is important
In order to ensure that this kind of trust serves its intended purpose, it must be created in advance of your need to access Medicaid for long-term care. There is a 5-year “look-back” period in which a Medicaid applicant’s assets can be reviewed.
Depending on your needs, a Medicaid Asset Protection Trust may be a good option to protect key assets while accessing the help you need to receive quality nursing care. An attorney may provide advice about these trusts and other planning strategies that can help people closer to Medicaid applications to care for themselves and their loved ones.