Are Irrevocable or Revocable Trusts Useful When Trying to Qualify for Medicaid?

Bloomfield Township estate planning lawyer

Navigating the legal waters associated with property ownership can become complicated, even more so as you approach retirement age. Many folks have heard about people in the past being able to save some or all of their assets by establishing legal trusts. Following this train of thought can lead to big trouble down the line because the rules are complex and have undergone changes during this century.

The medical expenses associated with aging often include long-term care and can quickly rise in a short period. For folks who have few assets of significant value, a Medicaid application can be the fastest and easiest way to obtain the funds necessary for proper medical care. This government program provides coverage for men and women who qualify based on income and certain other requirements, such as the value of current assets.

Well before you need to apply for Medicaid you need to begin planning how to protect your assets. This should be done as a part of your estate planning, including your will, trusts, and transfer of certain properties. However, the legal processes can be quite complicated and must consider the current federal laws regarding revocable and irrevocable trusts.

First of all, revocable trusts are a way that you can separate some of your assets from the rest. This can be useful for placing all of the properties you want a particular person to inherit. If they are named the beneficiary of the trust upon your passing, the transfer occurs quickly and is not subject to the hassles of the probate court. However, the downside to this is that the trust is considered part of your assets. Because you retain control over how the funds are handled and have the option to change or dissolve it when you want, the government will use it when determining your worth when applying for Medicaid.

On the other hand are irrevocable trusts, an option that some folks believe will protect them from this scenario. However, it is not as cut and dried as it might seem. While you cannot end an irrevocable trust, hence the name, the funds that you have added to it are now checked out by the government. You can be subjected to penalties for the assets that you have placed in the irrevocable trusts. If you have given away assets in the five years before your application, there are unavoidable penalties.

An interesting note is that any asset transferred within that period will be used by Medicaid officers to limit your qualifications. However, there are some exceptions to the rules, though they are complicated to enact correctly.

Speaking to a qualified estate planning or elder law attorney is the best way to determine the best way to get the medical care you need while protecting your assets in every way possible. These experts have studied the nuances of the law and know how to ensure you adhere to the law while taking care of yourself and your loved ones. You have worked hard for your assets and deserve the best legal representation possible when planning for your future!

Schedule Your Free Consultation with Our Michigan Experienced Estate Planning Attorney

Einheuser Legal, P.C. is an estate planning law firm in Bingham Farms, Michigan. We help families set up wills and living trusts. Attorney Michael Einheuser is an experienced estate planning lawyer serving residents in Bingham Farms, Troy, Farmington Hills, Rochester Hills, Southfield, West Bloomfield Township and Bloomfield Township.

Schedule your free consultation today by calling 248-398-4665.

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