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Home » Nursing Homes » Does Medicaid Count Assets in a Living Trust?

Does Medicaid Count Assets in a Living Trust?

December 14, 2012 by Larry Parman, Attorney at Law

Medicare does not pay for an extended stay in a nursing home or assisted living community, and these facilities come with a very high price tag.

When you discuss the matter with an elder law attorney you may come away with the realization that you would do well to angle toward Medicaid eligibility as a way to address future long-term care costs.

How many people wind up relying on Medicaid to pay for living assistance? According to the Kaiser Family Foundation around 70% of elders who are residing in nursing homes receive Medicaid benefits.

Medicaid evaluates your financial assets when you apply for the program. There is an upper resource limit of $2000, but your home, your motor vehicle, and many of your personal belongings do not count when the total is being tallied.

A question sometimes arises with regard to living trusts and Medicaid eligibility. Is it possible to place money into a revocable living trust to reduce your personal assets before applying for Medicaid?

The answer to this question is no. When you create a revocable living trust you have the power to change the terms or dissolve the trust. And, the majority of people are going to act as both the trustee and the beneficiary while they are still alive and well.

Because of the above you are retaining incidents of ownership and these resources are essentially still yours. As a result, they will in fact be counted when Medicaid is determining whether or not you are eligible for the program.

Larry Parman
Author, President and Founding Attorney
Parman & Easterday

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Larry Parman, Attorney at Law
Larry Parman, Attorney at Law
Founder and Owner at Parman & Easterday
After helping his own family deal with a lengthy probate and the IRS following his father’s untimely death in a farm accident, Larry Parman made a decision to help families create effective estate plans designed to reduce taxes, minimize legal interference with the transfer of assets to one’s heirs, and protect his clients’ assets from predators and creditors.
Larry Parman, Attorney at Law
Latest posts by Larry Parman, Attorney at Law (see all)
  • What Happens to Assets When Creating a Trust? - February 27, 2017
  • Are Living Wills Different from Regular Wills? - February 28, 2017
  • Why Wills are Such a Common Estate Planning Tool? - March 1, 2017

Filed Under: Nursing Homes Tagged With: Authorization for Final Disposition, Postmortem Planning, Probate, Veterans Benefits Planning

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