A Medicaid trust is a legal entity that can receive, administer, and shield assets during eligibility assessments. Establishing a Medicaid Asset Protection Trust is not especially difficult. However, most attorneys relinquish responsibility once the trust is formed.
Medicaid Trusts in New York State
Medicaid trusts can be established to help the trustor retain Medicaid benefits eligibility even if their income or assets exceed the allowed limit.
A Medicaid Asset Protection Trust could help you receive continued:
- Medical benefits
- Home care assistance
- Nursing home reimbursement
While Medicaid trusts provide several critical advantages, they are most often used to preserve an estate for later inheritance. By establishing a trust, Empire State residents can receive much-needed medical care without paying massive amounts of money out-of-pocket.
Establishing and Protecting a Medicaid Trust
Establishing a Medicaid trust is, more often than not, a fairly simple undertaking. Prospective trustors must file and execute trust documents that contain appropriate and legally binding language. Once the trust is filed, the trustor can transfer assets to its care.
However, because Medicaid Asset Protection Trusts are regulated by the state and scrutinized by the federal government, any mistake—no matter how minor—could lead to rejection. Under certain, limited circumstances, Medicaid officials may demand that benefits be repaid if they do not believe that a Medicaid trust was properly executed.
Since executing and administering a trust can present unexpected challenges, most New Yorkers have an attorney draft their trust.
How an Attorney Could Help You Ensure Your Trust’s Longevity
An attorney can help trustors navigate the early stages of trust preparation and formation. Nevertheless, few firms provide continued support after the trust has been signed and filed.
However, the Alatsas Law Firm offers our clients longer-term trust support. We could:
Help You Fund Your Trust
A Medicaid Asset Protection Trust is only effective if it is funded.
Similar to other trusts, a Medicaid trust can receive a variety of assets. A Medicaid trust could receive and administer:
- Residential real properties
- Commercial real properties
- Motor vehicles
- Bank accounts
- Savings accounts
- Investment accounts
Since Medicaid Asset Protection Trusts are a form of an irrevocable trust, they cannot always be retroactively modified to reflect the trustor’s change in circumstances. A Medicaid trust attorney could help you create a customized strategy to ensure that you retain maximal control over trust assets.
Enact Legal Transfers
Since trusts are discrete legal entities, they can “own” assets titled in their name. A trust that owns assets is a funded trust.
However, the person who establishes the trust—the trustor—must re-title certain assets before they can be transferred to the trust. Re-titling can entail a significant amount of legal legwork. While most banks and other financial institutions have well-established procedures to facilitate transfers, obtaining the documents needed to execute a transfer can be challenging.
The Alatsas Law Firm offers all our Medicaid Asset Protection Trust clients a full five years of continued support for legal transfers.
Assist You and Your Trustee
Medicaid trusts, like other irrevocable trusts, must be administered by a third-party trustee. Trustors and trustees must maintain close communications during the early stages of trust formation and should collaborate during asset transfers and re-titling.
The Alatsas Law Firm could help you, and your trustee, enact transfers and assess the implications of certain legal strategies.