Thinking about the future can be incredibly scary, even though it’s incredibly important to understand your options. As such, one matter you should consider is Medicaid planning to help cover the costs of a nursing home. Unfortunately, many underestimate just how expensive this long-term care can be, and find themselves unable to obtain the help they require. If you have not yet considered how you will pay for the costs associated with nursing homes, the following blog explores what you should know about the benefits of using trust funds for nursing home expenses and the importance of working with Tampa Estate planning attorneys to guide you through this process.
Can I Create a Trust to Avoid Nursing Home Costs?
Generally, when you are looking to plan for future long-term care, it’s imperative to understand your options. Paying for nursing homes isn’t as simple as saving up, because, unfortunately, this is incredibly expensive. As such, many people rely on Medicaid to help pay for these costs. However, unlike Medicare, Medicaid is a need-based program specifically utilized for the cost of long-term care. As such, in order to qualify, you’ll need to ensure you have less than the maximum amount of assets, which is $2,000.
As such, it’s important to understand that you can spend down your estate in order to qualify for this program. This typically includes gifting assets. However, depending on your circumstances, giving your assets to your beneficiaries directly may not be an option, whether they are too young to accept large quantities of money or you have too many assets to move, meaning you would incur a considerable gift tax. As such, one of the most effective options you may find is to create a trust fund.
If you are interested in this option, it’s necessary to understand that you must utilize an irrevocable trust fund. This is because this kind of trust moves assets out of your name and into the control of the trust. If you were to create a revocable trust fund, in which you retain control of the assets in this fund, it can be counted as part of your estate, meaning you likely would not qualify for Medicaid.
How Soon Must I Begin Planning?
It’s imperative to understand that there is generally a five-year lookback period for Medicaid planning. This means that any assets transferred within the five years before your application for Medicaid benefits will count toward your estate. As such, these transfers can render you ineligible for these benefits. It is critical to ensure you begin planning early enough to protect yourself and your assets.
Planning for the future can be overwhelming. That’s why it’s in your best interest to ensure you can connect with an experienced estate planning attorney to help you navigate this process. At Tampa Law Group, our firm understands how difficult these matters can be, which is why we will do everything possible to assist you through these times. Connect with us today to learn how we can fight for you.
