Unfortunately, many older adults are unaware of how astronomical the cost of nursing homes and other long-term care facilities can be. As such, they may want to utilize Medicaid to help with the expenses of these care homes. However, because Medicare is a need-based program, you must begin planning years in advance. If you have not yet considered your future, you’ll want to keep reading. The following blog explores what you should know about the benefits of using a Trust Fund to help with nursing home costs, as well as the importance of discussing your circumstances with an experienced Medina County, Ohio elder law attorney to help you navigate these difficult matters.
How Can a Trust Fund Help Me Avoid Nursing Home Costs?
Unlike Medicare, Medicaid is a need-based program that allows those who qualify to have the cost of long-term care facilities or nursing homes covered. However, to qualify, the maximum amount of liquid assets you can have is $2,000.
In order to qualify for this program, you may be able to spend down your assets. Essentially, this entails gifting property to remove it from your estate. However, you may be unable to outright make transfers to certain Beneficiaries due to their age or maturity level. Similarly, you may find that transferring assets could incur the Gift Tax. As such, creating a Trust Fund can help you remove the assets from your estate to help you qualify for Medicaid while also ensuring that the assets you’ve accumulated are given to your Beneficiaries following your wishes.
It’s critical to understand that you should utilize an Irrevocable Trust Fund for this process, as you will not retain control of the assets. If you create a Revocable Trust Fund, the assets held in the Fund will still be counted toward your estate, as you will regain control of these funds.
When Should I Start Planning?
If you are interested in utilizing a Trust Fund to help spend down your estate so you can qualify for Medicaid, it’s in your best interest to begin planning as soon as possible. Medicaid has a five-year “look back” period, in which all assets transferred during the five years prior to your application can be counted towards your estate, thus disqualifying you from the program.
As such, the earlier you can begin planning, the better and easier this process can be. That is why it’s in your best interest to work with an experienced attorney.
At Krause Law, our firm understands how difficult it can be to navigate estate planning, which is why we are committed to guiding you through this process so you can achieve the peace of mind that your future is secured. If you are ready to begin this process, don’t hesitate to contact our team today to learn how we can assist you.
