Seniors never know when their health will change, and they will need long-term care. Many seniors in Massachusetts count on Medicaid to help pay for that care. Yet, many seniors find that they need help qualifying for the program. Other times, families discover that Medicaid has a claim to assets that they thought they would get when the senior passes.
Giving assets away to qualify for Medicaid
Seniors often give away assets before moving into a long-term care facility. The value of those items can stop them for a time from qualifying for Medicaid. They may have too many assets to be eligible for the program if they hold on to the assets. Finally, if they hold onto the assets and qualify, the state can come after those assets at their death to sell them and recoup the money spent on the senior’s care. Therefore, seniors need to do estate planning.
Irrevocable trust
If you know someone with the time and talent to manage your affairs, you may want to create an irrevocable trust. Then, retitle your assets so that the trust owns them. If you have already made a will and are of sound mind, you can even redo it to put the assets named in the will into the trust. Remember that you give up control of your assets when you put them in an irrevocable trust. If you structure the trust so that you receive income from that trust, that income must be used to pay for your care.
Testamentary Trust
A loved one can set up a testamentary trust to care for the senior, but the senior cannot put funds into a testamentary trust. The funds in the trust are discretionary and be used in any way to benefit the senior. Assets in this type of trust do not affect if a senior qualifies for Medicare.
Both options may be available to protect a senior’s assets while still allowing them to qualify for Medicare. Therefore, seniors should weigh their options carefully.
