A Medicaid asset protection trust is an affordable, permanent option that is created to protect the assets of a person who expects to spend some time in a nursing home. The alternative to having a Medicaid trust is to purchase long-term care insurance. With this option though, you must plan way ahead. Also, the average American finds buying long-term care insurance way outside of their budget.
Hence, a Medicaid trust is the choice for most typical Americans. With a Medicaid trust, you become eligible for Medicaid benefits, and your assets will not be used to meet your nursing home or other long-term care bills. Your property can pass on to your loved ones after your demise.
A Medicaid trust is established by creating a correctly worded document and appointing a trustee. The trustee can be anyone such as adult children of the applicant, another relative, or a person with power of attorney.
There is a five-year look-back period to consider when you plan to establish the Medicaid asset protection trust. In other words, you must transfer your assets a minimum of five years before the time you could get into a nursing home. The look-back period ensures Medicaid does not disallow any assets you wish to transfer to the trust.
Benefits Of A Medicaid Asset Protection Trust
A Medicaid trust allows you to meet the asset threshold so you qualify for Medicaid benefits. A trust also has the advantage that you do not have to give away your property to be eligible for Medicare benefits. The disadvantage of giving away your estate to your loved is they could incur a considerable gift tax bill. There will be no such cost if your loved ones inherit your possessions after your death.
Your possession could also get confiscated if the person you gift dies, gets divorced, incurs a huge hospital bill, or gets into tax problems. Such likely scenarios make the Medicaid trust an instrumental part of planning an estate. It saves you a lot of time and expenses that you could incur in probate processes.
Why A Medicaid Trust?
A Medicaid trust disconnects you from your assets. It helps you avoid the need to spend down your assets and always leaves you much better off financially. Also, it gives you a legitimate way of protecting your assets from being used to meet your nursing care costs. It would be illegal to defraud Medicaid and lie about your assets.
The main reason most Americans do not create Medicaid trusts is they do not think they will require any form of long-term care. For older Americans, however, it would be a good idea to consider having a Medicaid trust. Statistics indicate 40% of Americans over 65 years of age wind up in nursing homes.
A Medicaid trust helps you avoid having to spend down your resources, which could end up leaving your loved ones not cared for adequately. It would be better to create a Medicaid trust in time so all your assets can be accepted, rather than waiting and spending down.
Contact An Experienced Trust Attorney In Tulsa
We are Tulsa trust attorneys with the experience and knowledge necessary to assist you with the establishment of your Medicaid asset protection trust in Oklahoma. Even if you do not think you will need long-term care, it is a good idea to preserve your assets now.
We offer a free, no-obligation consultation about the best approach to protecting your property. Call 918-876-4500 to schedule your free consultation.
Oklahoma Will and Trust is conveniently located at 201 West Fifth Street, Suite 404 in Tulsa.