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The Benefits of a Medicaid Trust

KSMH Law Group, PLLC Aug. 18, 2022

Eligibility for Medicaid in Texas is based on several factors, including your residency status, age, income, and asset value. Unfortunately, having substantial assets can make it difficult for you to meet Medicaid's asset limit. Through Medicaid Trust, you can transfer assets into a trust in order to protect such assets and become eligible for Medicaid long-term care benefits. An experienced Medicaid planning attorney can enlighten you about some of the benefits of a Medicaid Trust.

At KSMH Law Group, PLLC, we are committed to offering knowledgeable guidance and reliable advocacy to clients in the legal matters of Medicaid and asset protection planning. Our skilled attorney is available to discuss your unique situation and educate you about Medicaid Trust, how they work, as well as the benefits. We're proud to serve clients across San Antonio, Leon Valley, Live Oak, Kirby, and Universal City, Texas.

What Is a Medicaid Trust?

Medicaid Asset Protection Trust (MAPT) – also known as Medicaid Trust – is an irrevocable trust designed to protect assets and allow people to meet the asset limits for Medicaid long-term care. Any asset placed in the Medicaid trust will be exempted from your assets when determining your eligibility for Medicaid.

Essentially, Medicaid Asset Protection Trusts allows a person with excess assets – who would be ineligible for Medicaid – to become eligible and be able to receive long-term care benefits. However, to protect your assets for future generations and become eligible, the Medicaid Trust must be created:

  • 2.5 years before the need for home care Medicaid, or

  • 5 years before the need for nursing home care.

Some examples of assets that may be transferred into a Medicaid Asset Protection Trust include:

  • House – it must be your primary residence.

  • Personal assets, such as family heirlooms, jewelry, and other valuables

  • Motor vehicles

  • Qualified retirement accounts, including an IRA or 401(k)

  • Some life insurance policies

An experienced attorney can evaluate your unique situation and enlighten you about how Medicaid Trust works.

How Do They Work?

As mentioned earlier, a Medicaid Asset Protection Trust is an irrevocable trust. The grantor will relinquish control over the trust assets – property and assets placed in the trust – in order to avoid paying taxes on them. After the required look-back period, the trust assets will be considered gifts to the beneficiaries and be protected from Medicaid.

When creating a Medicaid trust, the grantor must name a person – other than themselves or their spouse – as the trustee. Though, the grantor will no longer be entitled to any asset placed in the trust. However, they may still be able to remove or replace the trustee.

What Are the Benefits of a Medicaid Trust?

Here are some benefits of establishing a Medicaid trust:

  • It allows you to achieve the asset limit for Medicaid eligibility.

  • It ensures that you do not pay for assisted living or nursing home care using your finances and accumulated assets.

  • It allows you to keep away assets for future generations.

  • It helps you avoid the tax implications of selling off assets.

  • Beneficiaries can receive assets in the trust or income generated by trust assets.

  • Trust assets can be distributed to beneficiaries at the grantor's passing.

  • Trust assets do not go through probate when the grantor dies.

Essentially, Medicaid trust allows you to become eligible for Medicaid long-term care while protecting your assets. An experienced Texas asset protection planning attorney can help determine whether Medicaid Trust is right for you and guide you through the processes involved in establishing one.

Legal Guidance You Can Trust

The financial implications of long-term care can be overwhelming. Medicaid provides affordable health coverage to help cover some of the costs of nursing home care or assisted living. However, having excess assets can make you ineligible for Medicaid. Fortunately, you may still qualify for Medicaid benefits and protect your assets for future generations through Medicaid Trust. An experienced Medicaid planning attorney can explore your available options and help you make intelligent decisions.

At KSMH Law Group, PLLC, our attorney has the diligence and resources to assist and guide individuals and families through the complexities of Medicaid, long-term care, and asset protection. As your legal counsel, we can enlighten you about the benefits of a Medicaid Trust and walk you through all the legal processes involved in setting it up. Also, we will outline an effective strategy to protect your estate and accumulated assets and help you in a way that works best for you.

Medicaid Asset Protection Trust remains a valuable strategy to meet the asset limits for Medicaid. Contact KSMH Law Group, PLLC today to schedule a simple case assessment with a skilled asset protection planning attorney. Our trusted attorney will offer you the brilliant advocacy and detailed legal guidance you need to navigate crucial decisions. We're proud to serve clients across San Antonio, Leon Valley, Live Oak, Kirby, and Universal City, Texas.