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How does a Medicaid asset protection trust protect assets?
The assets in a Medicaid asset protection trust not only allow one to meet Medicaid’s asset limit without “spending down” assets, but the assets are also protected for the beneficiaries listed by the trustee. This means the assets are safe from Medicaid estate recovery.
Can a trust be the trustee of a Medicaid Trust?
The creator or the creator’s spouse cannot be the trustee of the trust for the purpose of Medicaid eligibility. In a common scenario, the trust will provide that the parents are entitled to any income derived from the assets held by the trust and to the use and exclusive possession of the home during their lifetime.
Does irrevocable trust count as income for Medicaid?
Medicaid will not factor in trust assets when calculating the applicant’s available income and resources. Additionally, the transfer of assets into an irrevocable Medicaid Asset Protection Trust can qualify both spouses for Medicaid during the remainder of their lives. How can you set up?
Is a trust exempt from Medicaid asset limit?
In addition, the trust must be irrevocable in order to be exempt from Medicaid’s asset limit. This means that the trust cannot be cancelled or changed. Once the assets are transferred into the trust, they no longer belong to the trustmaker, nor can the trustmaker regain ownership of them.
What is a Medicaid Trust and how does it work?
Simply stated, these trusts protect a Medicaid applicant’s assets from being counted for eligibility purposes. This type of trust enables someone who would otherwise be ineligible for Medicaid to become Medicaid eligible and receive the care they require be at home or in a nursing home.
Is a revocable trust protected from Medicaid in California?
In most circumstances, revocable trusts do not keep assets safe from Medicaid’s asset limit and estate recovery. In addition, in CA, the state can only seek reimbursement of long-term care costs from those assets that go through probate (a legal process where a deceased person’s assets are distributed).