What is a Medicaid Trust?

A Medicaid trust is a trust that is created to help an individual qualify for Medicaid, which is an Illinois and US financed health-care program for qualifying low-income and disabled individuals and families. This type of trust gives another party the title and control of property owned by the person who is trying to qualify for Medicaid. With careful planning, it can render a person’s assets excused from consideration when he applies for Medicaid.

Why should I use a Medicaid Trust?

Individuals who anticipate being in nursing homes someday or have increased medical expenses should consider Medicaid trusts to protect their investments and homes, as well as their children’s assets, from being used to pay for their care. With the current pace of rising healthcare costs, most middle-class Americans should consider planning for the cost of expensive long term care that could be devastating for the children and their spouses.

Benefits of a Medicaid Trust and what are my other options?

Long term care insurance is the first possible option to protect your assets, but many individuals do not medically qualify and cannot afford to have this type of insurance. The other option is to just transfer your assets to your children, but you never know what could happen. Your children may get sued, file for bankruptcy, get divorced, pass before you do, and you may lose everything. Placing your assets in a Medicaid Trust protects your assets because after you place them into the trust they are not available to be used for your care. This allows you to place as many or few assets in the trust as you see fit. When your children are named as trustees to your will, they will not own the assets; they only have the ability to manage the assets that are placed in trust. Your children, or whomever you name as trustees, can only manage your trust under the constraints you have set for them, which is typically to pay you the income.

A Medicaid trust is complicated and requires an attorney who is familiar with Medicaid law to prepare. Medicaid trust policies can become even more complex by Medicaid rules for persons who receive home and community-based (HCD) waiver services or who live in nursing homes. Eileen Kerlin Walsh P.C. and Associates is a full service law firm with several years of experience in preparing Medicaid trusts. Please contact us to schedule a consultation. Call 708-448-5169.