If you have wisely decided to include Medicaid planning in your overall estate plan you may also have considered creating a Medicaid trust as part of that plan. Understandably, however, you may have a number of important questions that need to be answered before deciding whether or not a Medicaid trust is right for your estate pan. Specifically, you may want to know “ What happens to the assets in my Medicaid trust is I never need Medicaid? ” Only an experienced Illinois estate planning attorney can provide you with specific answers to questions regarding your Medicaid trust; however, a better understanding of how Medicaid trust functions and the basic structure of a Medicaid trust may also be beneficial.
Medicaid planning is an important addition to any comprehensive estate plan because of the likelihood that you will need to qualify for Medicaid benefits at some point down the road. Those benefits may be needed to cover the high cost of long-term care which averages close to $100,000 per year in Illinois. Qualifying for Medicaid, however, can be difficult because of the extremely low income and asset limits the problem uses when determining eligibility. By planning ahead you should be able to protect your assets while still qualifying for Medicaid when the time comes that you need it.
One Medicaid planning tool used by many people is a Medicaid trust. A Medicaid trust can work because it essentially shelters the assets transferred into the trust and, therefore, those assets are generally not considered “countable resources” when you apply for Medicaid. For the assets to be unavailable, however, they cannot legally be owned by you anymore. Therefore, a Medicaid trust must be an irrevocable trust. Assets transferred into an irrevocable trust are no longer owned by you because they become trust property. While this means they are no used to determine your eligibility for Medicaid, it also means you no longer have control over them. Once assets are transferred into an irrevocable trust they cannot be taken back out or used in any way other than according to the terms of the trust. Therefore, even if you never need Medicaid, the fate of the assets used to fund your Medicaid trust will be determined by the terms created when you created the trust.
For this reason alone it is imperative that you work closely with an experienced Illinois estate planning attorney to ensure that the assets are used in the way you intend after they become trust property. Contact the experienced estate planning attorneys at Nash, Nash, Bean & Ford, LLP by calling 309-944-2188 to schedule your appointment today.
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