How Can I Protect Assets From the Costs of Assisted Living?
Asset Protection Strategies for Assisted Living
This is not an easy subject, but a very real one for many Massachusetts families. If a loved one needs assisted living or long term care, health insurance will not pay for it. That means they will either have to pay out of their own assets, or apply for Medicaid/MassHealth for assistance.
Either way, this will deplete, and in some cases erase entirely, their legacy. If you plan ahead, however, there are ways to protect some assets from these costs. Here is what you need to know:
Medicaid currently has a five year look back. This means if you want to put assets in an irrevocable trust, or simply give them away, it will not help you with Medicaid unless it is done five years or more before you need to apply for benefits.
Protected assets can never come back to the person giving them away. This means any trust must be irrevocable.
The person putting the assets into trust can still receive income from those assets- for example, rent from real property or dividends from investments.
You will not be able to protect all assets without impoverishing yourself in the meantime. A good plan will leave some assets liquid (knowing they may be spent on care), and some protected in a Medicaid trust.
Learn more here about planning for assisted living.
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