An individual creates a special irrevocable trust in their lifetime in order to hold title to various assets that they own. This special trust is known as a Medicaid trust. It enables you to select your trustees and live peacefully in your personal property.
In the New York City, the average expense of old age home care is over $75K per year. If you are one of those people who worry about their estate being used for old age home expenses, a Medicaid trust is an ideal solution for you. Not only does it provide legalized protection of your properties but it also offers to manage them effectively.
It is possible that the income you earn might be too little to cover the costs of nursing care but relatively high for you to receive Medicaid services. If you desire getting long-term care at some time in your life, conducting Medicaid planning in extreme advance might be the right choice for you. You need to do so with the help of an elder care lawyer. Consulting a professional might raise your chances of qualifying for Medicaid.
The exempt and nonexempt properties are reviewed in order to determine your Medicaid eligibility. The nonexempt properties are considered as the ones that could be utilized for care expenses. On the other hand, exempt properties are not. However, there are some exceptions.Some of the nonexempt properties include savings and retirement accounts, stocks checking and more.
- Medicaid trusts not only allow individuals to protect their Medicaid eligibility but also their funds. As the funds of the applicant are held in trust, they cannot be considered as part of their application. However, it is necessary to utilize that money way before time in order to fulfill the requirements of Medicaid eligibility.A typical Medicaid trust in NYC can be of around 5-10K dollars. But the total expense of setting up that trust mainly relies on its policies, and the nature and total amount of assets being preserved. If you start your Medicaid planning way before time, you will have to pay far less for the entire process.
Non-Medicaid Benefits of Creating a Medicaid Trust in NYC
Other than the main advantage of receiving medical care rather than having to spend your personal funds, following are some non-Medicaid benefits of creating a Medicaid trust in NYC:
- The trust helps keep your assets private
- You get to keep your funds out of the probate court
- You don’t need to go through the trouble of multi-state probate affairs
- You can plan for any special needs
- Only your immediate family gets access to your funds
- As with every other healthcare program, there are some downsides to Medicaid and setting up a Medicaid trust in NYC. You can lose a degree of control over your estate with irrevocable trusts. Moreover, irrevocable Medicaid trusts cannot be altered or terminated.When your earnings are more than the income limit of Medicaid, you are required to become part of one more trust other than a Medicaid asset protection trust. Being part on a non-profit, pooled trust costs you around 9% of any assets in your possession.Now that you know about the benefits and drawbacks to creating a Medicaid trust in NYC, the following are some things you need to consider while going through the process:
Important Factors to Consider When Creating a Medicaid Trust in NYC
- You must consult an estate planning lawyer to learn about every type of asset transfer, and the appropriate timing to go ahead with them. Moreover, you must gain a proper understanding of the objectives of those transfers.
- You need to remember that creating a revocable living trust is not enough when it comes to protecting your funds when you are in an old age home. A Medicaid trust is entirely a different concept. If you still believe in the concept of ‘a trust is after all a trust’, you need to revise everything you have learned until now.
There you go! We hope that the information provided above about the benefits, drawbacks and the things you need to consider when creating a Medicaid trust in NYC will help you make an informed decision that fits your unique needs. Lastly, we recommend consulting an estate planning lawyer in NYC before you finalize your decision.