Greg: We’re getting ready to play in the ‘Make A Wish Foundation’, Golfers Granting Wishes tournament here at beautiful Deer Brook, a really pretty golf course, and we’re going to talk about ‘Medicaid Asset Protection Trusts’.
Why might someone need a Medicaid Asset Protection Trust?
Hayden: Imagine a jar is the Medicaid Asset Protection Trust, and inside it’s got, money, property, a car.
Greg: So, money, property, those are things you can put in an Irrevocable Trust, or any trust. Why would you want to use a Medicaid Asset Protection Trust?
Hayden: One way is when you’re trying to protect money from the Medicaid spend down.
Greg: Would this work in an emergency situation?
Hayden: It’s pre-planning.
Greg: That’s right, this is pre-planning. If you want to plan ahead, take a portion of your money and place it in a Medicaid Asset Protection Trust. You can have a private trust company or a family member, a son or daughter, manage the money that’s in this trust, or a professional fund manager like ‘Edward Jones,’ could manage this trust, and grow the money in the trust. The money can still be used to buy things for you, the dividends, the interest can still be used to provide for your health and welfare, but the important thing is, it starts the clock ticking, that 3 or 5 year clock ticking, which is what we talked about last week, the look back period.
So you want to do this ahead of time.
What would happen if we were 3 years in with the clock ticking on this Medicaid Asset Protection Trust, but you had an emergency Medicaid situation and had to start paying for nursing home care?
If you had to dip into this Medicaid Asset Protection Trust right away, because it’s not protected until 5 years (after the clock has starting ticking) for nursing home care, you would only be forced to have a spend down of 2 years of this money. Then after the 5 years it’s locked.
So, it starts that clock ticking. That’s what you want to do when you’re planning ahead. This is a great tool for people who have some retirement funds they have set up, an income they have set up, or investments they’re managing. Maybe they have money they don’t really touch that much but they want to make sure it passes on to the grandkids, or they want to protect it for themselves or their spouse, if one of them needs long term care.
Then this is a great way to ensure it’s there, and can still be used for their benefit to help take care of them, but it’s not spent down on nursing home care, if long term care insurance is not available.
A Medicaid Asset Protection Trust is an irrevocable trust which means you can’t revoke it and there is a third party trustee. They are great pre-planning tools for Medicaid planning or long term health care planning.
So if you’re interested in talking about any kind of trust, a great combination would be a revocable living trust for the money that was very liquid for you, and then other monies in a Medicaid Asset Protection Trust.
You know what, I’m not a big fan of the car in an irrevocable trust, but properties, what about properties that you want to protect? So here’s the advantage. It does take 5 years for nursing home care, 3 years for assisted living, to protect these, but, if you wanted to sell a property, and someone is in nursing home care, and has benefits, like Medicaid benefits, you can sell that property. If you sell the house, the money is still in the trust.
If you have any questions you would like to ask about Medicaid Asset Protection Trusts, you can call McIntyre Elder Law at 704 259-7040, or you can find us on Facebook and twitter @LawyerGreg. So leave a question or a comment, I do answer any questions or comments throughout the week so get writing.
Call me if you have any questions:
Elder Law Attorney
McIntyre Elder Law
123 W. Marion Street, Shelby