For seniors in New York, finding the funds for long-term nursing care can be a major concern. Nursing care in a facility is not covered by Medicare, and the costs quickly amount to tens of thousands of dollars. Instead, Medicaid, a program jointly administered by both federal and state governments, can provide support for long-term nursing care. However, there are very restrictive guidelines for Medicaid qualification, so seniors may spend extensive time and money attempting to spend down their assets in order to qualify. This can often disrupt existing plans for family heirlooms and other assets.
Exploring a Medicaid protection trust
In order to receive Medicaid support, you must have less than $2,000 to $3,000 in assets. Some assets, like a primary home, a car, clothing or a wedding ring, are exempt from the calculation. However, bank accounts, investments and other key assets are counted and must be spent down before you can become eligible for Medicaid. A Medicaid protection trust provides one option to help seniors plan for the future, allowing those assets in the trust to be excluded from the mandatory spend-down before coverage kicks in.
Guidelines to keep in mind
However, you cannot set up a Medicaid asset protection trust immediately before you enter an assisted living facility. There is a five-year “look-back” period to determine an applicant’s countable assets. Therefore, this kind of Medicaid planning should be taken up before you think the need is imminent.
A Medicaid asset protection trust must be irrevocable, with other people — typically family members or adult children — named as the trustees. It can provide a mechanism to receive much-needed support for long-term care without losing your lifetime of savings. An elder law attorney may provide advice on which Medicaid planning measures may be helpful for your future.