Many Americans are embracing Medicaid due to the expensive nature of nursing care homes in the United States. In NYC, the monthly average nursing care home cost is around $13,000, which is too expensive for the average senior.
Medicaid, however, is free as it is jointly funded by the federal and state government. While this program remains free, it is important you understand that it is not for everyone. You have to qualify to enjoy the benefits that comes with this program. To qualify, your assets and income has to be below a certain threshold. However, you can still qualify if your assets are below the threshold.
What is Medicaid?
Medicaid is a public health insurance program that offers health care coverage to low-income families including individuals in the U.S. The program is funded by the state and federal government. Medicaid is operated at the state level denoting that coverage and administration differ from state to state. This simply means that state A may decide to provide Medicaid coverage for individuals within an age bracket while State B may decide not to. Each state operate their Medicaid in the best interest of its residents.
Generally, Medicaid is available to persons and families who meet specific income-based criteria. Recipients are United States Citizens, permanent residents, or legal immigrants. Around 70.6 million individuals were covered by Medicaid as of September 2020.
What is an irrevocable trust?
An irrevocable trust is a trust where its terms cannot be changed, modified, or terminated without the knowledge of the grantor’s named beneficiary or beneficiaries. Irrevocable trusts cannot be altered after creation, or at least they are very hard to change.
The terms of an irrevocable trust is never made public if your trust is not subject to probate. If you create a will, it must be filed with the court to kick start the probate process. This means that anyone can read it. However, it is not the same with an irrevocable trust.
Qualifying for Medicaid if your assets are below the threshold
If your assets are above the threshold to qualify for Medicaid, you’ll be considered ineligible for this program. To be eligible you don’t have to spend down your assets. You need to protect it from Medicaid. There are a few ways to do this. One of the common ways is by setting up a Medicaid asset protection trust. With a Medicaid asset protection trust, you should be able to transfer ownership of your assets and still be eligible for Medicaid.
One of the best ways to protect your assets from Medicaid is by setting up a Medicaid asset protection trust. A Medicaid asset protection trust is an irrevocable trust, meaning that an irrevocable trust can help in protecting your assets when applying for Medicaid.
However, an irrevocable trust will not be effective in protecting ones assets when applying for Medicaid if the owner of the trust or his or her spouse is designated as beneficiary of the trust. If that happens, Medicaid will count some or the entire assets in the trust as available to the individual, thus making him or her ineligible for Medicaid.
Do you need an Elder law attorney?
If you need an elder law attorney for matters regarding your elderly loved one, don’t hesitate to call our office. Or if you are a senior and you need help with applying for Medicaid, you can also contact us for assistance. In addition, in the event that your assets and income are above the threshold, signaling your ineligibility for Medicaid, you can contact us if you wish to set up a Medicaid Asset protection Trust. However, you must have the Medicaid look back period in mind. This means that, after placing your assets in this trust, you are to wait for the next 5 years before applying for Medicaid to avoid any form of sanction.