The sad fact is that the older you get, the more likely it is that you will need some kind of long-term care. If this includes a stay in a nursing home, you may be looking at a cost as high as $82,000 a year. Not many people are able to save that kind of money, and many rely on Medicaid to help pay for the care they require.
Since qualifying for Medicaid places strict limitations on your income and assets, you may be concerned about what will happen to your savings, your home and other assets Medicaid counts against your eligibility. Like many, you may hope to protect some of those assets for your family, but they may still count against you if you just give them away. That is why many in your situation investigate the advantages of trusts to preserve their assets.
Irrevocable and revocable trusts
Trusts are valuable tools for protecting wealth, and many have legitimately used trusts to qualify for Medicaid without having to spend down a lifetime of earning and saving. However, it is important to understand New York’s very specific laws regarding trusts and the Medicaid look-back period. The look-back period is the time before you apply for Medicaid and during which you may not transfer or give away assets without incurring a delay in benefits. Transferring assets to a trust during that time may cause such a delay.
In fact, you may find that, under state law, only certain trusts will protect assets from counting toward your eligibility for benefits. For example, revocable trusts almost always count as assets since you retain control over anything you fund to them. Irrevocable trusts, however, are under the control of your trustee and may not count as your assets. An irrevocable trust does have its drawbacks, such as preventing you from accessing the funds it holds, and any income you receive from it may count against you.
Deciding what is right for you
Your situation may call for a different course of action, and fortunately, there are other alternatives and additional types of trusts. Each method of qualifying for Medicaid and protecting your assets must comply with New York laws, and this can be quite complicated. It is always wise to have a legal professional guide you along the way so that you can make an informed decision to avoid additional stress at a time when you may already be feeling anxious.