Medicaid law and living trusts

Published in The Post Standard, March 2004

Too many Americans mistakenly assume that they only need a will in order to effectively plan their estate. In fact, an effective estate plan will include a health care proxy, durable power of attorney, last will and testament, deed with life use, Medicaid planning and a living trust.

You can transfer your house to a friend or family member and then retain life use for you and your spouse. Retaining this life use means you keep your Star reduction on your school taxes and possibly save the house should you need to go to a nursing home.

“Many people know a little bit about the Medicaid law. But that little bit of knowledge is often a half-truth or entirely wrong,” says attorney Stephen T. McMahon. It may not be necessary, for instance, to wait three years to apply for Medicaid.

“You cannot expect friends or relatives to give you accurate advice about the Medicaid law,” McMahon said.

“It is complex and constantly changing, but it contains many credits and exemptions for you that can save bank accounts, houses and other property.”

The McMahon Law Firm also represents families at the local Medicaid office and prepares Medicaid applications. A lawyer experienced in Medicaid law can save some of the family assets even if you are already in a nursing home. The Medicaid law does allow you to transfer some assets either just before you enter a nursing home or while you are in a nursing home.

Finally, the living trust drafted in compliance with the Medicaid law is another way to preserve family assets. Even if you have a living trust, you will still need a Last Will and Testament to distribute those assets that you did not place in the trust.

It is also important to plan for the possibility that at some point you may no longer be able to handle your affairs. The durable power of attorney allows one or more persons to act on your behalf. The word durable refers to the fact that the power of attorney will continue to be valid even if you later become incapacitated or incompetent. A health care proxy names someone to make medical decisions for you if you become incapacitated. A living will specifies what medical treatments you want and do not want if you cannot speak for yourself.

A graduate of the University of Notre Dame Law School, Mr. McMahon offers families the estate planning documents discussed in the preceding paragraphs and prepares Medicaid applications for nursing home care. Mr. McMahon provides a free initial consultation in order to provide information to the family. For more information, call 315.487.3724 or 800.813.4529 or visit www.SteveMcMahonLaw.com