In Michigan, many older adults underestimate the exorbitant costs associated with nursing homes and other long-term care facilities. Consequently, they often look to Medicaid for assistance with these expenses. However, this is a need-based program. If you have not yet considered your future care needs, please read this as we explore the advantages of using a Trust Fund to help cover nursing home costs and the importance of consulting with an experienced Washtenaw County Trusts Attorney to navigate these complex issues.
How Can a Trust Fund Help Me Avoid Nursing Home Costs in Michigan?
First and foremost, Medicaid is a need-based program, unlike Medicare, that covers the cost of long-term care facilities or nursing homes for eligible individuals. To qualify, your liquid assets generally cannot exceed $2,000.
To meet the asset requirement for Medicaid, you may “spend down” your assets. This involves gifting property to remove it from your estate. However, outright transfers to certain beneficiaries may not be feasible due ot their age or maturity, and such transfers could also incur a Gift Tax. In these situations, establishing a Trust Fund can be beneficial. It allows you to essentially remove assets from your estate to qualify for Medicaid while ensuring your accumulated assets are distributed to your beneficiaries according to your wishes.
It’s important to utilize an Irrevocable Trust Fund, as you will not retain control of the assets. If you establish a Revocable Trust Fund, the assets held within it will still be counted as part of your estate since you would be able to regain control of these funds.
When Should I Start Planning for My Future Care?
To maximize your chances of qualifying for Medicaid through a Trust Fund, it’s highly advisable to initiate estate planning as early as possible. Medicaid enforces a five-year “look back” period, meaning any assets transferred within five years of your application date can be included in your estate, potentially leading to disqualification.
Beginning this process sooner will make it significantly smoother and more effective. Although you can start planning at any point in your life, early planning will allow for more informed decision-making and mitigate stress on loved ones later on. This is precisely why parenting with an experienced attorney is in your best interest.
At Collis, Griffor, & Hendra, we recognize the complexities of estate planning. Our commitment is to guide you through every step of this intricate legal process, ensuring you achieve the peace of mind that comes with a secure future. If you are prepared to begin this important process, please don’t hesitate to contact our legal team today to discover how we can assist you.