When facing a sudden health crisis, you don’t want to be denied coverage just as you need in-home care or an expensive nursing home stay. Unfortunately, the income and asset thresholds for Medicaid benefits are far lower than you may expect. To keep your hard-earned assets available for your family and still qualify for coverage, you may want to consider a Medicaid asset protection trust (MAPT).
Protecting Your Home From Medicaid With a MAPT
Simply gifting your home to your children seems like a good idea at first when trying to reduce your assets, but that decision will come back to bite you. Medicaid uses a five-year lookback period to examine your finances. If you give your home to your kids today, and then need Medicaid four years from now, the cost of that home will still be included in your eligibility.
Here’s where a specific kind of irrevocable trust comes into play. You can place an asset like your home in a Medicaid asset protection trust so it still goes to your heirs but you don’t lose out on benefits. Here’s how it works:
- The MAPT prevents the property from being counted towards your Medicaid eligibility.
- When you pass away, the assets in the trust go directly to a beneficiary you name, like a child or grandchild.
- A trustee you appoint oversees the assets in the MAPT and decides how to manage the property until your death.
- Once the assets are in the trust, they are no longer available to you—although you can still live in the home.
- Income generated by the trust—such as if you are renting out part of the home—can still be provided directly to you by the trust.
There is one critical drawback is that this type of trust, however—it can’t be used for cash assets. To keep cash income safe from Medicaid, you need to join a pooled income trust instead, which has different rules and qualifications. A skilled New York Medicaid and estate planning attorney can talk over the differences and help you craft a comprehensive plan to protect your estate and still receive benefits.
Get Help From an Experienced New York Attorney
In need of Medicaid but not sure how to shelter your assets while receiving coverage for a nursing home stay? Send us a message and let us know how we can help you and your family with any legal needs.