One of the primary concerns many clients have in nursing home planning is figuring out how to protect their assets from being exhausted entirely by nursing home expenses. Trust can certainly be a good option. However, you need to recognize that not every trust can provide appropriate asset protection. With the help of our Ossining nursing home attorney and a nursing home plan, you may be able to keep most of your assets and still qualify for Medicaid long-term care coverage.
How do revocable living trusts work?
A revocable living trust is a great tool because it allows you to modify its terms at any point, including revoking or canceling the trust altogether. You can make these changes as you see fit at any time during your lifetime. Then, at your death, your revocable trust becomes irrevocable so no further changes can be made.
Revocable trusts are very flexible because you always have the opportunity to make changes to its terms as your circumstances change. That also means that your revocable trust assets are still your property because you effectively do not give up control of them. The trustee of a revocable trust does not take charge of the trust until either your incapacity or death.
An irrevocable living trust operates differently
Unlike a revocable trust, an irrevocable trust cannot be modified in any way once it has been executed, as the name suggests. Although it may not sound like a good thing to give up any control of your assets, the irrevocable nature of this type of trust can still be very helpful. One of the most important advantages is that the assets in an irrevocable trust become out of the reach of creditors and legal judgments. Those assets are also immune from probate and estate taxes because they are essentially removed from your estate.
When it comes to Medicaid or nursing home planning, irrevocable trusts can be very useful in becoming qualified for Medicaid. While removing your assets from your estate through an irrevocable trust, you can still continue to receive income from those assets and remain eligible for Medicaid. Our Ossining nursing home attorney can help you set that up.
The majority of individuals need assistance paying for nursing home care
We all know that a nursing home is a residential health care facility that provides skilled nursing care and other supportive services to residents. The average cost of nursing home care in New York is more than $100,000 a year. The typical family cannot afford to pay for those services without assistance. However, with the help of an Ossining nursing home attorney in creating an effective plan, incorporating the proper type of trust, you and your family can be prepared in case you need long-term nursing home care.
Medicaid puts a limit on a recipient’s income and assets for eligibility
Individuals can qualify for Medicaid if they have limited income and the limit on financial resources is $2,000 for an individual and $3,000 for a couple. Assets are categorized as either countable or non-countable. For instance, your residence is not countable if your spouse still lives in the home or if you expect to return to the residence once your need for nursing home care has ended. Also exempt are one vehicle, your personal belongings, a small burial policy or life insurance policy.
Medicaid will only cover nursing home care that is deemed “medically necessary”
Medicaid pays for a nursing home services only when it has been determined that having access to skilled care is medically necessary. In New York, your medical condition and your ability to perform certain activities of daily living, including getting around, using the bathroom, eating and moving from bed to chair or wheelchair. This evaluator will assess your abilities and give you a score of your need for nursing home care.
Medicaid will use this evaluation to determine your need for nursing home care, as well as which type of nursing would be better suited to meet your particular needs. Medicaid will also determine the specific services Medicaid will cover. To put it simply, nursing homes care is considered medically necessary if your medical condition is sufficiently serious that the only appropriate care available to you would be in an institution.
Managed Long-Term Care is another option for New York residents
New York offers another option to nursing home care known as Managed Long-Term Care (MLTC). It is a program that provides long-term care services for Medicaid recipients through private companies. The program includes nursing home and home health services. In New York, more Medicaid recipients are being transitioned over to managed care programs. In fact, if you are over the age of 21 and you have either Medicaid or Medicare, then you are required to enroll in a managed long-term care program.
The possibility of “spending down” your assets in order to qualify
Many people will be allowed to “spend down” their assets so they can qualify for Medicaid if their assets are too great to qualify otherwise. The concept of spending down involves using your countable assets to pay off specific debts or expenses. However, before attempting to spend down your assets, it is important to obtain advice from an Ossining nursing home attorney so you can avoid being assessed a penalty period and a delay of your benefits.
If you have questions regarding nursing home planning or any other elder law matters, please contact the experienced attorneys at the Law Offices of Mary A. Miller, P.C. for a consultation. You can contact us either online or by calling us at (914) 939-6565. We are here to help!
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