A revocable living trust will not protect your assets from a nursing home. This is because the assets in a revocable trust are still under the control of the owner. To shield your assets from the spend-down before you qualify for Medicaid, you will need to create an irrevocable trust.
Understanding Irrevocable Trusts
When you create an irrevocable trust and transfer your assets into it, you will name a beneficiary or several beneficiaries. These may be your children, grandchildren, or other loved ones, or even a beloved charity.
Moving your assets into this trust then effectively removes your ownership rights to the assets.
An irrevocable trust differs from a revocable trust because you cannot make changes following its creation and funding. You will not be able to modify, amend, or terminate this type of trust without the use of a trust protector. With proper planning, you will not need to worry about Medicaid counting the assets in the trust against you.
Uses of Revocable Living Trusts
People often use revocable living trusts to help their family members avoid probate court. With a revocable trust, you can remain in control of what happens to your assets. You can add and remove assets, make changes, and even close the trust without having to consult anyone else.
Your assets are not protected from Medicaid in a revocable trust because you retain control of them. The primary benefit of a revocable trust is that you can name a beneficiary who will receive payouts from the trust after your death. This allows them to avoid entering the assets in the trust into probate in New Jersey.
Medicaid Planning and Asset Protection
Most people who require nursing home care or placement in another type of long-term care facility must rely on Medicaid to pay for this type of care. Families who have assets to cover the initial costs may spend thousands of dollars depleting their nest egg and spending their children’s inheritance before finally meeting the qualifications for Medicaid.
Medicaid requires you to have few assets and little income to qualify. In addition, they look at your financial records for the last five years to ensure you did not give assets away to qualify. However, there are some legal ways to plan for this and protect your assets, so you get the care you need and qualify for Medicaid sooner.
This may include:
- Advance planning that occurs before the five-year look back period
- Putting assets into an irrevocable trust
- Using other asset protection tools to protect your savings and investments
You do not want to try to handle this on your own, though. The rules are complex and the penalties for violating the rules during the look-back period can be significant. Medicaid could bar you from applying for benefits for a number of months or even years.
Let Bratton Estate and Elder Care Attorneys Help You Protect Your Assets
The team from Bratton Estate and Elder Care Attorneys — Medicaid planning lawyers, social workers, and a registered nurse — can create a plan that works for your family. We can help you or a loved one qualify for Medicaid sooner while also protecting as many of your assets as possible.
Even if you already require long-term care and need Medicaid as soon as possible, we may be able to help protect some of your assets from the nursing home. There are legal solutions to the challenges you face, and we can help you find them.
When you enlist our team, you will meet with an attorney who will:
- Discuss your situation with you
- Learn about your financial situation, including assets and income
- Get to know your preferences and needs
- Help you understand your options
Only once we have a good idea of what kind of help you need will our attorneys go to work protecting your assets and ensuring you meet the Medicaid qualifications sooner.
Talk to a Member of Our New Jersey Asset Protection Team Today
At Bratton Estate and Elder Care Attorneys, we know how to protect your assets from the nursing home. We can help you put an asset protection plan in place and work on getting you qualified for Medicaid sooner.
No matter if you are planning for the future or you have a loved one who needs long-term care today, we are here to help. Call us at 856-857-6007 to learn more about how we can help you pay for a nursing home, assisted living facility, or other long-term care in New Jersey.