Many people are troubled with accessing Medicaid- a governmental health insurance program for vulnerable and low-income citizens in the United States. Medicaid trust will help you to qualify for Medicaid if you are not eligible.
Medicaid trust holds onto your assets to achieve this; the program is irrevocable, unlike other revocable trusts like family trusts in which you can amend or cancel.
The better part of Medicaid trust is estate planning, where the program helps you to preserve your asset or savings for inheritance while assisting you to access Medicaid services.
This article covers the details you should know about Medicaid trust.
The Assets to Transfer to Medicaid Trust
As indicated earlier, you only qualify for Medicaid long-term cover if the combined value of your assets does not exceed the value specified by your state; the Medicaid trust program will help you transfer some assets to them until it is below your state's resource limits. You can transfer all countable assets like bonds, stock, bank savings, and real estate property.
However, you should not be bothered by non-countable assets, such as retirement account, simply because it is currently paying out.
Personal belongings such as cars or your primary residence are also excluded from this program. Some life insurance whose face value is below a particular limit and your spouse's assets are also not included.
Medicaid Trust Look-Back Period
You are required to transfer your assets to a Medicaid trust periodically to avoid them accumulating beyond your state's Medicaid resource limit.
This duration may vary, but it is five years in many places. Suppose you do a transfer within a period lesser than the looked-back period, expecting to obtain the cover.
In that case, you will be disqualified since the property will not be protected by Medicaid trust. You will be covered by Medicaid long-term care after the look-back period. For instance, if the look-back period is five years, you will be eligible after five years.
The Cost of Medicaid Trust
There is no exact cost of Medicaid trust, as it depends on the value of your countable assets that you would like to share with Medicaid trust.
You can know the value you have to transfer by subtracting your state's resource limit from your total countable assets.
However, some trustee charges are paid annually for your property management. These fees, of course, will lower the value of the assets by the time your beneficiaries inherit.
Such expenses are worth instead employing a spend-down strategy to qualify for Medicaid. You don't have to gift your assets or sell them to qualify.
Because of resource limits to qualify for Medicaid long-term care, Medicaid trust holds your asset so you can be eligible. It's important to note that only countable assets are transferred to the Medicaid trust.
There is no cost for joining a Medicaid trust, but annual fees are payable to manage your property, and a Medicaid trust has a look-back period that varies in different states.