Older Americans should be aware of Medicaid policies on assets. These citizens hope to rely on Medicaid to pay for long-term care, when it is needed. Medicaid pays for nursing home care, home care and other services for eligible persons. Additionally, the program covers some personal care services for the home-bound. Medicaid recipients must pass a financial test before the benefits kick in. Hopeful recipients have to provide evidence of their assets. Applicants are allowed to own a home, one car, $1500 worth of life insurance and have money saved for funeral arrangements. Additional assets count against eligibility.
The home plays a key role in Medicaid eligibility. Applicants are allowed to own a primary residence but the equity must be below a certain amount. In the most recent rules, citizens are allowed to exempt $750,000 in home equity. It makes sense that families should plan ahead. Meet with a lawyer to discuss the future and Asset Protection. However, do not even think about giving away assets to family members. Doing so makes applicants ineligible for five years. The government punishes the individual for trying to break Medicaid rules.
The lawyer may recommend that you give away assets, anyway. The key here is to keep enough money to live on for the five-year period. Likewise, an individual may choose to give their assets to the children and have them pay for long-term care. This approach can work if the person is receiving a pension or social security. Alternatively, the lawyer who handles Asset Protection may recommend the family establish a trust. A person may transfer assets to an irrevocable trust with an independent trustee. Independent means the trustee cannot be related by blood or marriage.
Further, the grantor has no control over the trust. Revocable trusts do not work because the grantor serves as the trust’s beneficiary and trustee. Rather, in an irrevocable trust, the trustee makes independent decisions. Trustees cannot even take money for themselves. It is important to many people to leave a legacy. However, none of these options should be considered without the help of a lawyer. Visit Facerlawoffice.com to learn more. You can follow them on Google+ for more information.