Because of their vulnerability to financial abuse, elderly Americans often require advanced protections against scams and theft. An asset protection trust for an elderly American can help protect assets from scam artists and manipulative thieves, as well protect assets from creditors and legal judgments,
Another benefit of establishing an asset protection trust is to help older Americans pay for the high costs associated with assisted living and nursing home care. Medicare, the federal government health care program for Americans at least 65 years old, covers nursing home costs for short-term rehabilitation at a nursing home or assisted living facility.
Many Americans drain their life savings long before Medicaid kicks in to provide financial support. Setting up a Medicaid Asset Protection Trust can help you plan financially for the day when you need long-term senior care.
What is a Medicaid Asset Protection Trust?
Medicaid places a limit on the number of assets you can own to qualify for financial assistance. Starting a Medicaid Asset Protection Trust allows you to shield enough assets that put you under the asset threshold established by Medicaid. This type of trust enables an otherwise unqualified American to qualify for Medicaid benefits. The assets you place in this type of trust no longer belong to you, but instead, the trust owns the assets. Starting a Medicaid Asset Protection Trust is an effective strategy to protect your assets from creditors and legal judgments.
It is important to note that you have many types of trusts to choose from, and not every one of the trusts complies with Medicaid standards.
How Does a Medicaid Asset Protection Trust Work?
A Medicaid Asset Protection Trust has several components. First, the grantor establishes the trust. Second, the grantor names the trustee who manages the trust for the beneficiaries. Third, the grantor must name the beneficiaries of the assets placed in the trust. The grantor and the grantor’s spouse cannot become the trustee and designated beneficiary of a Medicaid Asset Protection Trust. The grantor cannot be named a beneficiary because Medicaid considers a beneficiary financially capable of funding healthcare expenses.
What Types of Assets Can I Place in a Medicaid Asset Protection Trust?
You can place a wide variety of assets in a Medicaid Asset Protection Trust. If you decide to put your home in this type of trust, you can continue to live in your house. You can also sell your home and use the trust to buy a new one. States have different laws concerning what assets are eligible for placement in a Medicaid Asset Protection Trust. For example, Michigan law states that a home is a countable asset when put into a Medicaid Asset Protection Trust.
Other types of assets you can place in this type of trust include stocks, bonds, bank accounts, and mutual funds.
Contact an Estate Planning Lawyer
Americans that need help from Medicaid do not have to drain their savings to qualify for financial assistance. With a low threshold for assets to qualify for Medicaid, you should consider starting a Medicaid Asset Protection Trust to protect you during your senior years. You not only receive protection from unsavory criminals, but you also get to shield assets to help qualify for Medicaid assistance.
A properly written asset protection trust can take care of your loved ones during your lifetime, as well as after you die. One of the intangible benefits of starting this type of trust is that it should give you peace of mind knowing you are taking care of your loved ones.
Schedule a free consultation with an attorney from Cloud Peak Law Group to learn more about asset protection trusts for elderly Americans.