Long-term care planning can ensure the care you need as you age. For many, Medicaid eligibility can be a significant concern. The current asset limit is just $2,000, so most people won’t be eligible. However, you can attain eligibility by transferring assets into a Medicaid Asset Protection Trust.
Types of Assets for a Medicaid Asset Protection Trust
When determining eligibility, Medicaid doesn’t count all assets an applicant may own, so you might not need to place some assets in the trust. Let’s look at some assets Medicaid might exclude from eligibility:
- Primary Residence: Most states exempt a primary residence as long as the applicant or their spouse resides there. However, some states limit the amount of equity interest the individual can have in the property.
- Personal Vehicle: One vehicle is typically exempt regardless of value. Some states may also allow a second vehicle if it is under a specific value or over a certain age.
- Personal Property: Many states don’t count personal belongings like clothes, appliances, and furniture.
- Retirement Accounts: Some states exempt IRAs and 401(k)s if they’re in payout status. However, the disbursements may count toward your income eligibility.
- Life Insurance: Many states exclude term life insurance policies from eligibility. However, policies with a cash surrender value may count.
Being exempt from Medicaid eligibility means you can keep these assets and still get the support you need. However, there may still be reasons to place some exempt assets in a trust. State rules can change, and Medicaid might try to recover costs after the individual dies.
Cash and Bank Accounts
Cash and bank accounts are good places to start for assets that should go into the trust. Consider transferring checking and savings accounts to reduce your countable assets and protect against estate recovery.
Real Estate
Any real estate beyond your primary residence may need protection. It might even be a good idea to transfer your primary residence. Your residence could be subject to recovery after your death. You may also need to consider the equity limits.
Investment Assets
Consider transferring stocks, bonds, and mutual funds to protect them from eligibility and potential estate recovery.
Personal Property
You can also place valuable property like jewelry, antiques, family heirlooms, and vehicles in your Medicaid trust. While some property is exempt, high-value items might count toward eligibility.
Insurance Policies
Some life insurance policies may impact Medicaid eligibility. However, you can place policies in a trust.
Please note that this is a basic guide to the assets you might place in a trust. The rules vary by state, and individual circumstances may also matter. Consulting an attorney can help you make the most of the trust while avoiding mistakes.
Do you need help with Medicaid eligibility? Click here to contact the Scott Law Offices. We can help you create trusts and transfer assets. Reach out to learn how we can help you with long-term care planning.
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