Qualify For Medicaid Earlier By Using Irrevocable Trusts

You can qualify for Medicaid earlier if your transfer assets to an

Douglas L. Kaune

Medicaid Asset Protection Trust. By: Douglas L. Kaune, Esq.

As most people know, there is a Medicaid disqualification period caused when gifts are made. This disqualification period must lapse before the person making the gift can receive Medical Assistance (Medicaid). Our preferred recipient of the gifted assets is the Medicaid Asset Protection Trust rather than individual recipients. We design this Trust to deal specifically with Medicaid asset protection and the particular client’s goals. Gifts to this type of trust start the Medicaid ineligibility clock ticking while insulating the gifted assets from your children’s creditors, possible divorce or poor spending habits. This Trust goes a long way toward achieving the best of both worlds, the assets are safe during your lifetime and after the proper passage of time they are safe from nursing home spending so your children can enjoy them. Read this other recent Blog Posting for additional information and review of the Irrevocable Trust as used for Elder Law asset protection planning. Sign in at the top of this page to obtain the right to receive the Free Report we have prepared to detail the Irrevocable Trust concept.

The person creating the trust (Grantor) names a trustee or trustees and writes the rules of how the assets will be used for the rest of his or her lifetime and after his/her death.   The trustee  must abide by these rules.  The Grantor can set rules on how the assets in the trust can be used and who can receive distributions both for the rest of his/her life and also at death.  The Grantor can receive an income flow from the trust or choose not to.  The Grantor can either be made responsible to pay the income tax on the earnings of the trust or the trust can be made responsible to pay the taxes.  We can either structure the trust assets to be included in the Grantor’s estate at death or for them to transfer outside of the decedent’s estate depending on the income and inheritance tax issues in each case.  So you can see, there is not a one trust fits all approach.  These Medicaid Asset Protection Trusts are tailored for each individual client based on their specific circumstances.

Unlike a gift to trust, an outright gift to children can not have the same benefits and nuances.  The outright gifts are at the whim of the recipients and the things that happen in their personal lives.  They can spend the assets, give them to other people or lose them to creditors, law suits or divorce.  None of these possibilities are appealing and that is why a gift to the Medicaid Asset Protection Trust can be so powerful.

The Medicaid Trust concept solves so many potential concerns that it also allows people to enter into Elder Law planning more freely and confidently.  Please stop before making outright gifts and consider seeking legal advice on the use of an irrevocable trust best for you.

Contact Douglas L. Kaune at 610-933 8069 or dkaune@utbf.com.
Doug is a member of NAELA and a Partner with Unruh, Turner, Burke & Frees, P.C. which is a full service law firm with offices located in Malvern, Phoenixville and West Chester and also serving Philadelphia, Kennett Square, Limerick, Oaks, Newtown Square and other towns in Chester County, Montgomery County, Delaware County, Bucks County, Berks County, Philadelphia County Pennsylvania (PA).