Over the past few decades, there has been a population boom of older Americans who need long-term care. Whether they live in an assisted-living community or a more intensive medical facility, these Americans and their families face enormous expenses. Many Americans rely on Medicaid to help with these costs, but Medicaid presents some particular challenges.
Medicaid is a federal program designed to help people with medical expenses. Unlike Medicare, Medicaid is open to Americans of all ages, but its eligibility requirements are very different. To be eligible for Medicaid, people must have below a certain amount of assets. The amount varies by state, and New York’s limits change every year. A person who owns more than the threshold amount is ineligible for Medicaid.
Using trusts
A person who has more than the threshold amount may find themselves in a bind. They may own some property, but that doesn’t mean they can easily afford the high costs of long-term care.
One way to get around this problem is through establishing a trust. If you put your property in a living trust with yourself as beneficiary, you are technically no longer the owner. Instead, a trustee manages the property for you and any other beneficiaries. If you establish this trust carefully, your assets will fall below the Medicaid threshold amount while maintaining some income and the ability to pass your property on to your loved ones.
Establishing this kind of trust and maintaining Medicaid eligibility is complicated. Those who are interested in the possibility should speak to a knowledgeable estate planning and elder law attorney about their options.