A Medicaid Asset Protection Trust, sometimes referred to as an Irrevocable “Income Only” Trusts or Medicaid Trusts, and is used to protect an individual’s assets and allows an individual to possibly qualify for Medicaid long-term care.
Assets transferred into a Medicaid Trust are managed by a trustee, a person or entity appointed by the Medicaid Trust’s grantor. When assets are placed in a Medicaid Trust, the grantor loses the ability to access the principle, but keeps the right to use the income from the Medicaid Trust hence the a/k/a “Income Only” Trust.
In order to qualify for institutional Medicaid, there is a five year look-back period for assets transferred into the Medicaid Trust. The five year look-back time starts ticking when an asset is transferred into a Medicaid Trust. After that time period has passed, Medicaid will no longer take into account the value of the property or any other assets transferred to the Medicaid Trust.
Currently, there is no look-back period for Medicaid applicants applying for home and community-based services. This means that if you transfer assets this month, you may be eligible for community-based services, the following month without paying a penalty for any non-exempt asset transfers.The 30-month Community based Medicaid look back period has been tolled to March 31, 2024. This means that the earliest date that New York may begin implementation of a 30-month lookback for home care is April 2024.
A Medicaid Trust can only be revoked by Court Order or with the consent of all the beneficiaries and the grantor. However, once the Medicaid Trust is revoked, the assets are no longer protected and would then be an available resource for Medicaid eligibility and possibly subject for estate recovery.
A Medicaid Trust is a great estate planning tool but is not appropriate for everyone, therefore, you should consult an experienced attorney to assess whether or not a Medicaid Trust is appropriate for you and your family. For further information regarding a Medicaid Trust or setting up an estate plan, please contact us to schedule an appointment.
