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Does a Trust Protect Assets from a Nursing Home?

Care through a nursing home is a reality for many Massachusetts residents. Sadly, this often-needed type of care is expensive, and you’ll find your assets are being drained by the high costs. There are different types of trusts available to you to protect your assets, but some protect your assets better than others.

Protecting your assets means getting the financial support you need for your care as well as providing for your loved ones following your passing. Our lawyer at The Heritage Law Center is here to create a plan that is right for you. With Matthew Karr, Esq., on your side using his knowledge and years of experience, you can feel certain your assets are protected and ready to serve your family.

What Is a Medicaid Trust?

MassHealth (Medicaid in Massachusetts) is a state and federal income-based program that pays for health care for certain low- and medium-income people living in Massachusetts. MassHealth Standard is for seniors (age 65 or older) who need long-term care and have limited income and assets.

A trust holds title to the assets you transfer to it. Think of it like a box that can hold your assets during your lifetime and thereafter for the benefit of your beneficiaries. When you pass away, instructions in your trust can detail how your assets will be distributed to your loved ones.

Trusts may be revocable or irrevocable. A revocable trust allows you to make changes to your trust during your life, enabling you to manage your assets more freely, but it doesn’t provide the asset protection that an irrevocable trust does. You can’t terminate or make changes to an irrevocable trust, such as a Medicaid trust, but it does offer asset protection when you need long-term care.

With an irrevocable trust like a Medicaid trust, funds are transferred into the trust, and ownership of them is no longer considered yours. You’ll need to name a trustee to be in full control of these assets, and once you name this designee, it can’t be changed. Funds are then available to your loved ones when you pass.

When seeking out nursing home care, many families with low or medium income may consider applying for MassHealth Standard. This insurance plan covers long-term health care expenses that can drain a person’s assets. However, this program has strict eligibility rules, and too many valuable assets can prevent you from receiving coverage.

A Medicaid trust allows you to move your assets out of your control, which means they won’t be considered when qualifying for MassHealth or when dealing with nursing homes. Keep in mind, though, that there’s a look-back period of five years, where all wealth management is considered.

When someone applies for MassHealth, MassHealth has the right to examine an applicant’s bank and financial records for up to five years immediately prior to the date of application. If they discover a transfer of assets during this period, whether to a trust or to another person, they will impose a disqualification period on the applicant’s eligibility (a length of time the applicant won’t be eligible for MassHealth).

When thinking about MassHealth planning options for you, check out our free MassHealth planning report as you reach out to our lawyer for personalized guidance for more information about your options.

Assets Protected by a Medicaid Trust

Round-the-clock care is expensive, especially if you need this care for years. Without a Medicaid trust in place to help you qualify for MassHealth Standard, you may spend thousands of dollars per month for your care. Remember, the key is to plan in advance due to MassHealth’s five-year look-back period.

You may also be worried about losing your home. When you’re preparing a Medicaid trust, you can include your house in this trust. This puts the ownership of the house out of your hands while allowing you to live there without worrying that your long-term medical expenses will impact it, as long as the house has been in the trust for 5 years.

If you’re still not sure a Medicaid trust is right for you, reach out to a skilled, compassionate attorney like Matthew Karr, Esq. He can detail how a Medicaid trust will impact your specific case and review your options to protect your assets.

Protect Your Assets with a Skilled MassHealth Lawyer

Nursing home care is expensive and can drain assets that took years to accumulate in a matter of months. Whether you’re assisting your parents in planning for the future or putting a plan in place for yourself, an attorney like Matthew Karr, Esq., can be instrumental in helping you get your finances in order and protecting your loved one’s inheritance.

Let the legal team at The Heritage Law Center review your options with you during a consultation. Contact us today at 617-299-6976 or by completing the online form below.