How to Protect Assets from Medicaid
Older adults in Westchester County should be prepared for the possibility of needing costly long-term care in a nursing home or assisted-living facility in the state of New York. Like other states across the country, New York has a “lookback period” for purposes of Medicaid, which is the period prior to applying for Medicaid benefits for long-term care in which a senior cannot transfer assets without being penalized under New York law. Every older adult in New York should understand how the Medicaid lookback period works, and how to protect assets from Medicaid. You should work with an experienced Westchester County elder law attorney to determine your options for protecting your hard-earned assets. In the meantime, we want to provide you with information about potential ways you can protect your assets from Medicaid while remaining eligible for Medicaid long-term care benefits.
Purchasing Long-Term Care Insurance
If you want to protect your assets, you should find the best long-term care insurance plan for your needs. When you have long-term care insurance, you may not need to rely on Medicaid to cover your stay in a nursing home or an assisted-living facility. However, unless you sign up for a policy in your 40s or 50s, long-term care insurance may not be the most affordable option for you as the plans tend to get pricey and often cover only a portion of the cost of nursing home stay. As a result, you will be responsible to pay the balance.
Medicaid Asset Protection Trust
Another option is a Medicaid asset protection trust, which is often known as an Irrevocable Income Only Trust. In many situations, a person will create an asset protection trust when they are planning to seek Medicaid benefits. A Medicaid asset protection trust is an irrevocable trust, which means you will not be able to take the assets out once you put them into the trust. However, the benefits of an asset protection trust are many. Your trustees have the ability to purchase you a new home if you desired to move, while selling your current house. You reserve the right to live in your home for the rest of your life, while keeping all of your tax exemptions on the property. After the five-year lookback period, the assets in the trust are protected and you can guarantee an inheritance for your children.
Income (Pooled) Trusts
When you seek Medicaid benefits to pay for long-term care, you will only be allowed to have a minimum income in order to qualify for these government benefits. The most common income trust, which can provide a monthly income over a period of time, is known as a pooled income trust. This is an irrevocable trust, similar to a Medicaid asset protection trust. Your lawyer can explain the benefits of a pooled income trust for you in more detail.
Contact an Elder Law Asset Protection Lawyer in Westchester County
Do you have questions about protecting assets in general, or establishing a Medicaid asset protection trust or another type of trust? One of our experienced Westchester asset protection attorneys can assist you. Contact Meyer & Spencer, PC for more information about the services we provide to older adults and their families in New York.