If you ever need long-term care, it may be difficult to manage the costs without draining your savings, pension, or other income sources, which is why Medicaid planning is so important. While your income and resources may not be able to cover the cost of care, they may still disqualify you from Medicaid if they exceed the income or asset limits.
Assets fall into two classifications: exempt (i.e. your primary residence), and non-exempt. Non-exempt assets include:
- Retirement accounts
- Mutual funds
- Real estate property
A Medicaid Asset Protection Trust (MAPT) is an irrevocable trust that ensures that you qualify for Medicaid and protects assets from recovery. With this trust, assets are owned by the trust and meant to be left to the beneficiaries.
While some people consider transferring ownership of their property or assets to their children (or others), a Medicaid trust is a much safer, more secure option. Giving away property or money can affect your eligibility if handled improperly because of gifting penalties.
Assets eligible to be put into the trust include but are not limited to:
- Checking and savings accounts
- Stocks and bonds
- Mutual funds
- Your primary residence
If any assets in the trust are income-producing, you can still collect the income, but you should also be mindful of income limits. It is also important to note that Medicaid trusts are still subject to the Medicaid look-back period, which can impact your eligibility if your income or assets exceeded the cap during this period. There are also other tax and legal concerns that can complicate matters, which is why you must reach out to our attorneys sooner rather than later.
How Much Does a Medicaid Trust Cost?
Costs of setting up a trust will vary depending on terms, other planning, number, value, and nature of assets being put in the trust. You should also plan for accounting fees associated with annual tax returns as well as ongoing legal fees.
Contact Our Estate Planning & Elder Law Attorneys Today
Whether a MAPT is right for you depends on a variety of factors, including but not limited to:
- Whether you need Medicaid within the immediate future
- Your relationship with possible beneficiaries
- The assets and funds you have available
At Losavio & DeJean, LLC, The Louisiana Elder Law Firm, we are equipped to help you prepare for the future by incorporating Medicaid planning into your estate plan. Our estate planning and elder care attorneys know that no two cases are alike, which is why we offer our clients individualized legal counsel and are not afraid to think outside of the box.