What is a Medicaid Trust, and Why Might You Need One?

For many people, an important concern is how they will afford the costs of long-term care after they retire. For those people, a Medicaid trust may provide what they need to ensure their medical expenses will be covered into their old age. But what exactly is a Medicaid trust, and how does it help people obtain long-term healthcare benefits?

Explaining the Medicaid Trust

    In simple terms, a Medicaid trust (more formally known as a Medicaid Asset Protection Trust) is a type of legal arrangement in which a person places their personal assets in the care of another person or group of people, known as trustees. These trustees manage the person’s assets on their behalf, and have a legal duty to ensure their property is handled with care. While a person’s assets are in the Medicaid trust, they are not considered to be a part of a person’s property by Medicaid, even though they still legally belong to them.

The Benefits of a Medicaid Trust

    The primary reason to put your assets in a Medicaid trust is that Medicaid has an upper limit on the amount of total assets you can own and still qualify for Medicaid benefits. However, any assets you place in a Medicaid trust are not counted towards that maximum limit. This means that, even if you would not normally qualify for Medicaid due to having too many assets, you can still potentially qualify for Medicaid benefits if you place them in a trust. This, in turn, can help you to pay for the costs of long-term healthcare by getting Medicaid benefits, rather than having to pay those costs out of pocket.

Complications With the Medicaid Trust

      Dealing with the asset requirements to qualify for Community Medicaid are not that simple. For example, starting April 1 in New York, Community Medicaid is instituting a 30 month / two-and-a-half year “look-back” period for in-home long-term healthcare benefits, which will count any assets you held going back thirty months or the purposes of qualifying for Medicaid. This means you need to start Medicaid planning as soon as possible to maximize the benefits you can receive from a Medicaid trust.

Knowing if a Medicaid Trust is Right For You

    A Medicaid trust is not necessarily right for everyone. Every person’s needs are unique, and the only way to know if one of the trusts might suit your needs is to speak to a lawyer with experience handling estate law matters. They can inform you of your options, and help you to create an estate plan that suits you best.
    The estate planning attorneys at David J. Lorber & Associates, PLLC will work with you to come up with a plan that protects your interests and ensures that you and your loved ones are taken care of. For comprehensive estate and elder law services in New York, call David J. Lorber & Associates, PLLC at (631) 750-0900 or contact us online to schedule a free consultation at our Setauket office.