A Trust That Matters Even if You Are Not Rich: Protecting Assets From Long Term Care Costs

As we age, our healthcare needs increase, and long-term care becomes a possibility for many. Unfortunately, the cost of long-term care is often exorbitant, and can easily wipe out a moderate-income family's savings. However, with proper planning, families can prepare for these expenses and ensure that they receive the care they need. One effective way to do this is by creating a Medicaid trust.

A Medicaid trust is a legal tool used to protect assets from the high cost of long-term care while still allowing individuals to qualify for Medicaid. Medicaid is a government-funded healthcare program for low-income individuals, including those who require long-term care. However, to qualify for Medicaid, individuals must meet strict income and asset requirements. By creating a Medicaid trust, families can protect their assets while still qualifying for Medicaid, ensuring that they receive the care they need.

Moderate-income families may be hesitant to create a Medicaid trust because they believe trusts are only for the wealthy. However, exactly the opposite is true.  It is the moderate-income families who have worked hard to accumulate savings and assets who are most likely to lose most of their legacy due to long-term care costs.

By creating a Medicaid trust, families can transfer their assets to the trust, which is managed by a trustee. The assets themselves cannot be taken out of trust, but the income from those assets can be used to support the person who created the trust. If this is done at least five years before you need Medicaid assistance, those savings and assets in the trust are protected and can be passed on to their heirs even if you receive Medicaid assistance.

Creating a Medicaid trust does require some planning and legal expertise, so it is important to work with an experienced attorney who can help guide you through the process. However, the benefits of a Medicaid trust are well worth the effort. By protecting their assets, families can ensure that they receive the care they need without having to worry about the high cost of long-term care.