A living trust can protect assets from a nursing home only if the trust is irrevocable. An irrevocable trust can provide asset protection because with this type of trust, the grantor — the trust creator — doesn't own assets in the trust from a legal standpoint.
This means that, in most cases, a nursing home resident can keep their residence and still qualify for Medicaid to pay their nursing home expenses. The nursing home doesn't (and cannot) take the home. ... But neither the government nor the nursing home will take your home as long as you live.
The basic rule is that all your monthly income goes to the nursing home, and Medicaid then pays the nursing home the difference between your monthly income, and the amount that the nursing home is allowed under its Medicaid contract. ... Medicaid also allows a few other exceptions.
A revocable living trust will not protect your assets from a nursing home. This is because the assets in a revocable trust are still under the control of the owner. To shield your assets from the spend-down before you qualify for Medicaid, you will need to create an irrevocable trust.
The general rule is that if a senior applies for Medicaid, is deemed otherwise eligible but is found to have gifted assets within the five-year look-back period, then they will be disqualified from receiving benefits for a certain number of months. This is referred to as the Medicaid penalty period.
Actually, if you are in a nursing home for indefinite care, they DO take your bank acount. They freeze it. And use the money to pay for your care.
Under federal Medicaid law, if you transfer certain assets within five years before applying for Medicaid, you will be ineligible for a period of time (called a transfer penalty), depending on how much money you transferred. Even small transfers can affect eligibility.
Yes, you can rent or sell the home. As a co-owner, your mother will receive her proportional share of either the net rental income or the proceeds of the sale. In terms of income, her share will have to be paid to the nursing home along with your mother's income.
You cannot deliberately look to avoid care fees by gifting your property or putting a house in trust to avoid care home fees. This is known as deprivation of assets. ... If you do this, your local authority will come after you, and possibly the person that was given the transfer of assets to reclaim what is owed.
The downside to irrevocable trusts is that you can't change them. And you can't act as your own trustee either. Once the trust is set up and the assets are transferred, you no longer have control over them.
With a revocable trust, your assets will not be protected from creditors looking to sue. That's because you maintain ownership of the trust while you're alive. Therefore if you lose a lawsuit and a judgment is awarded to the creditor, the trust may have to be closed and the money handed over.
A trust can protect your assets from medical expenses, especially when an illness or accident causes catastrophic debt.
A durable financial power of attorney is recommended, since it remains in effect even if the parent is incapacitated. An aging parent can add a “payable on death” provision to bank accounts, according to Legacy Assurance. This ensures their money will bypass probate and be paid directly to beneficiaries.
In short, AHCCCS is using this system to review the last 5 years (60 months) of financial records of ALTCS applicants. The challenge is that the report, which AHCCCS will not give you, does not accurately identify individual deposits and withdrawals by date and specific amount.
For your personal assets, such as your home you can hide your ownership in a land trust; and your cars you can hide in title holding trusts. These documents can keep your association with these items out of the public records.
An asset protection trust is irrevocable, meaning that any transfer of assets into the trust is permanent. In other words, the trust would own the assets in question and they would be managed by the trustee. By removing those assets from your ownership, you can protect them against creditor lawsuits.
Deprivation of assets means you have intentionally decreased your overall assets, in order to reduce the amount you contribute towards the cost of care services provided by the local authority. ... Any past disposal of assets can be considered as possible deprivation.
Annuities are of less benefit for a single individual in a nursing home because he or she would have to pay the monthly income from the annuity to the nursing home. ... Income from an annuity can be used to help pay for long-term care during the Medicaid penalty period that results from the transfer.
The Medi-Cal "Look-Back" period in California is 30 months. "Transfer" means an outright gift or a "sale" made at less than "fair market value." If a disqualifying transfer of property is made, Medi-Cal will calculate the period of ineligibility for nursing facility level of care.