People in Woodland Park may be planning on utilizing Medicaid to pay for nursing home care in their old age. However, in order to qualify for Medicaid, a person can only have a low threshold of assets — $2,000 in countable assets in 2020 and less than $2,349 in monthly income. This doesn’t mean, though, that one must become impoverished before they can be eligible for Medicaid.
This is because not every asset counts towards this threshold. It is possible in some circumstances for a person to turn a countable asset into a non-countable asset by establishing an irrevocable trust.
With an irrevocable trust, one’s assets are retitled into the name of the trust and a designated trustee will handle them. Once an asset is placed into a trust, you cannot take it back or change the terms of the trust. Assets in an irrevocable trust are considered non-countable assets when it comes to qualifying for Medicaid.
However, it is important to think ahead if you wish to utilize an irrevocable trust to protect your assets. This is because, for Medicaid purposes, transferring assets to an irrevocable trust is akin to a gift, and thus is subject to Medicaid’s five-year “look back” period. Assets transferred during the look-back period will delay a person’s ability to qualify for Medicaid benefits.
Ultimately, if you are considering executing an irrevocable trust for Medicaid eligibility purposes, it is important to seek professional help. This post does not offer legal advice, but elder law attorneys are available to provide more information on this topic to those interested.