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Consider creating an asset trust to help your loved one qualify for Medicaid benefits.

LEGAL

What You Should Know

If your loved one needs ongoing care, whether at home or elsewhere, the cost can be crippling. For example, a nursing home can cost up to $500 a day. Unfortunately, Medicare does not pay for such long-term care.

Another option is Medicaid, which may cover long-term care, depending on the state. But to qualify, your loved one’s assets cannot exceed certain thresholds, which range by state from $2,000 to $14,850. Your loved one may already qualify for Medicaid. If not, they won’t qualify until long-term care expenses have exhausted their assets. This won’t leave much for a surviving spouse or other family.

Your loved one can receive Medicaid benefits and preserve some assets, however, by creating what’s called an irrevocable trust to manage their assets. Not all irrevocable trusts (aka asset trusts) provide protection in a Medicaid context. The right irrevocable trust allows a person to transfer control of their home and money to a trustee (person who manages the trust). This makes it possible to protect these assets while qualifying for Medicaid — though not always immediately.

Trusts are a complex topic, especially when combined with Medicaid. It’s best to work with an experienced elder care attorney who can help you make the decision and create the trust.

Steps To Take

  • Find out if your loved one qualifies for Medicaid under your state’s eligibility rules.
  • If they don’t qualify, read up on asset protection trusts using the links above.
  • If a trust looks like an option, contact an experienced elder care attorney to answer questions and begin the process.
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