In this Elder Law Minute, Wes Coulson discusses what you need to know about trusts and Medicaid eligibility.
I want to talk today about trusts and Medicaid eligibility. First thing I want to tell you is sort of a bit of a disclaimer, and that is: All I can tell you in this is things that are general information. There are lots of different types of trusts, and within any given type of trust pretty much every trust is a little bit different from every other one. So, for every generalization that I can tell you, there are going to be exceptions and it’s just going to vary. This is something where you really need legal assistance even to assess it. So, generalizations.
Two things here:
What about a living trust?
The most important thing you need to know there is that living trusts, although they do lots of wonderful things like keeping your estate out of probate, don’t do anything to protect assets when it comes to Medicaid eligibility. The Medicaid agencies in both Missouri and Illinois pretty much look through them and treat assets that you own through a living trust the same as assets that you own in your own name. So, is there a type of trust that can protect assets from being lost to long-term care costs? And the answer is yes. It’s what’s known as an irrevocable trust. Something that’s set in stone.
What about an irrevocable trust?
We refer to ours as an asset preservation trust and a real estate preservation trust. Those can be very helpful, but as part of the planning we need to be aware that Medicaid treats putting money in that type of trust as a gift transfer of assets. So, if it’s not done five years in advance of planning it’s not that we can’t do it, we just need to take that in to consideration and make sure as part of the planning that if there is going to be an initial delay in eligibility, that we have as part of the planning made sure that the person who is going to be applying for Medicaid is able to pay the nursing home during that initial delay in eligibility.
Bottom line answer
Trusts are a good thing. They’re a really good thing. If you don’t have one, it’s a good idea to have one but you need to talk to a good elder law attorney, decide what it is you need that trust to accomplish for you, and we will help you putting the right one in place. If you have one and you’re looking at long-term care costs, you need to get a good elder law attorney to assess it to make sure that it’s not going to cause problems you didn’t expect.
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Coulson Elder Law is dedicated to providing families in the St. Louis area with their Elder Law needs. Our practice areas include Asset Preservation Planning, Veterans Benefits, Medicaid Eligibility, Alzheimer’s Planning, Special Needs Planning, Estate Planning and more. We understand the financial challenges you may face as you and your loved ones grow older. At Coulson Elder Law, our clients’ well-being is our number one priority. For immediate help, call (618) 632-7000 (IL) or (314) 567-9292 (MO), or Contact Us and we will get in touch as soon as possible.