One thing that can really take a toll on finances is health care. When you get older you soon realize that Medicare is not going to cover all of your health care bills, such as disability care in a long term nursing home. People who have worked hard all their lives to build up their estates can lose it all if they become sick and need to go into a long term care facility. You normally have to go into spend down mode until you become almost penniless before Medicaid will kick in. One good option to consider is a Medicaid trust. A Medicaid trust is a financial tool that can be used to shield your assets from the need to be spent down.
However, for a Medicaid trust it needs to be a irrevocable living trust but these kinds of trust are more like a revocable living trust where you can change things. One can go online and find revocable living trust information to help them understand the difference. Most people consider a Medicaid trust too drastic of a step to take so they don’t usually consider this option. Besides that, the government can recapture your assets if you didn’t place them in a Medicaid trust longer than five years before being sent to a long term care facility. The government eyes the Medicaid trust with suspicion and will check to see if you gave assets away to your children with the intent of avoiding responsibility for future medical bills.
The best Medicaid trust is one where you transfer your assets to an irrevocable trust that is managed by an unrelated trustee. In other words, you can’t name your children as your trustee. There are many risk factors to consider in regards to a Medicaid trust. You may be disqualified if you can still access your assets or if you benefit anyway from the trust. There are laws that govern Medicaid trust options so the best advice you can find online is to be wary. There are some other options that may be better. You can also find out information online about a credit shelter trust too.