Medicaid Trusts - Westchester, NY
With careful Medicaid planning, you may be able to preserve some or all of your estate for your children or other heirs while meeting the Medicaid asset limit (in most states, a nursing home resident covered by Medicaid may have no more than $2,000 in "countable" assets; in New York is it $14,850).
The problem with transferring assets is that in giving them away, you bare no longer in control of them. Even a trusted child or other relative may lose them inadvertently through divorce or an unexpected lawsuit. A much safer approach is to put them in an irrevocable trust.
A trust is a legal entity where a "trustee" holds legal title to property for the benefit of the "beneficiaries." The trustee must follow the rules provided in the trust instrument. Whether trust assets are counted against Medicaid's resource limits depends on the terms of the trust and who created it.
Medicaid Trusts are Irrevocable Income only Income Only Trusts. An "irrevocable" trust is one that cannot be revoked by the grantor after it has been created. This type of trust is usually drafted so that the income is payable the "grantor" for life. The principal cannot be accessed by the grantor or his spouse. At the grantor's death the principal is paid to his designated beneficiaries. The funds in the trust are protected and the grantor can use the income for his living expenses. For Medicaid purposes, the principal in these income only trusts is not counted as a resource, provided the trustee cannot use it to pay you or your spouse any principal. However, if you do move to a nursing home, the trust income may have to go to the nursing home.