To effectively manage the complexities of long-term nursing home costs in New York, integrating a Trust Fund into your financial strategy can be a viable option. However, the degree to which a Trust can shield assets from rising car expenses hinges on the specific type of trust established and its proper management. Please continue reading as we explore how you can utilize a Trust Fund to avoid nursing home costs and the importance of connecting with an experienced Rockland County Estate Planning Attorney for guidance.
Can a Trust Fund Help Me Avoid Nursing Home Costs?
The effectiveness in shielding assets from nursing home costs hinges on the structure and management of the Trust Fund.
Generally, a Revocable Living Trust provides minimal protection from nursing home expenses. This is because you maintain complete control over the trust’s assets and can modify or terminate it at any point. Consequently, need-based programs like Medicaid, which assist with nursing home care, view these assets as accessible to you. This may require their liquidation to cover costs before you qualify for benefits.
An Irrevocable Trust, particularly a Medicaid Asset Protection Trust (MAPT), serves as a robust mechanism for shielding assets from Medicaid eligibility assessments. By relinquishing ownership of assets to an irrevocable trust, you are effectively removing them from your estate. This approach can facilitate meeting Medicaid’s rigorous asset thresholds, even for those with significant wealth, thereby enabling qualification for benefits.
A crucial consideration, however, is the standard five-year “look back” period associated with MAPTs. If assets are transferred into the Trust within this window, and a Medicaid application is subsequently filed, these transfers might incur penalties, potentially postponing your eligibility for benefits.
When Should I Start Planning?
If you are considering establishing a Trust Fund to help spend down your estate to qualify for Medicaid, it’s in your best interest to start the planning process well in advance of needing long-term care to ensure you successfully shield your assets. As mentioned, Medicaid has a five-year “look back” period, in which they review financial transactions to ensure assets weren’t transferred to avoid paying for care. The earlier you can begin planning, the better to ensure a seamless process.
As you can see, understanding the distinctions between various Trust structures is essential for anyone aiming to protect their assets from future nursing home costs. Consulting with a qualified estate planning attorney is highly advisable to ensure you set up the Trust correctly. At The Lauterbach Law Firm, we are prepared to help you safeguard your assets from nursing home costs while still being able to access Medicaid benefits when needed.
