Using a Medicaid Asset Protection Trust

A Medicaid Asset Protection Trust is a trust that is designed to help you move your money into an irrevocable fund so that you can more easily qualify for Medicaid. Money that is in one of these trusts does not count as funds that are eligible to be used in a determination of whether someone can qualify for Medicaid–or in California–Medi-Cal.

 

There are a few terms that need to be known about these types of trusts. The person that creates that trust is called the grantor, and they are the person that must transfer assets into the trust. The trustee is the person who manages the trust and the funds within it. There will sometimes be a distribution trustee, but this is usually combined into one role. The beneficiary is the person who “benefits” from the use of the trust. This is the person that the trust funds go to. Finally, the trust protector is the person who makes sure that the grantor’s intentions are followed through with. Depending on the process, one person may fulfill more than one of these positions.

 

A Medicaid Asset Protection Trust can be helpful for someone looking to qualify for Medi-Cal.

 

Medi-Cal has a five year lookback period. For the 60 months prior to a Medi-Cal application, all financial transactions can examined before a decision is made. Depending on when the trust is created, this can have an impact on whether or not someone will qualify for Medi-Cal. This is one of the big reasons why a Medicaid Asset Protection Trust should be looked at as soon as possible, especially if there is a suspicion that senior care might be needed in the future. There’s no way to know this for certain, so meeting with a team of professionals is helpful to learn more about this.

 

Real estate, checking and savings accounts, stocks, bonds, life insurance, and several other assets can be transferred into a trust. It’s advised that things like 401(k)s and certain types of IRAs not be placed in Medicaid Asset Protection Trusts because of the tax consequences of using pre-tax dollars. An attorney can give you more information about the best way to use one of these to your advantage.

 

With that said, when looking at a Medicaid Asset Protection Trust, it is really important to follow the steps correctly in order to protect your financial health. If this is something that sounds like it could be helpful to you, then it is important that you speak with an attorney that specializes in elder care so that you can be guided in the right way to go about setting one of these up. They are completely legal and they are designed to help you, but the process needs to be set up correctly in order for this to be beneficial. U.S. federal law states that individuals have the right to protect and maximize their money, but that doesn’t mean that there are not laws in place governing how this can be done. Working with a skilled attorney is a necessity if you are thinking of using a trust to protect assets and become eligible for Medi-Cal.

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