Salem area residents may already know that a stay in a nursing home can be extremely costly. They may want to utilize Medicaid benefits to help pay for long-term care but may be concerned that they will have to deplete their assets to qualify, leaving their heirs with nothing.
This fear is not unfounded. Medicaid benefits only kick in once a person has a nominal amount of assets in their name. However, there are ways to preserve your assets for your heirs while still qualifying for Medicaid.
Consider an irrevocable trust
One option that may be worth considering is the execution of an irrevocable trust. In an irrevocable trust, a person places their assets in a trust, which is a separate legal entity that cannot be changed and is managed by a named trustee. Because these assets are no longer in the name of the individual and are no longer controlled by the individual, these assets may not be counted when it comes to qualifying for Medicaid.
The five-year “look back” period
However, there is one caveat when it comes to irrevocable trusts. If a person transferred assets into a trust within five years of applying for Medicaid, this could lead to a delay in eligibility for Medicaid benefits. This “penalty period” will be calculated by dividing the value of the transferred assets by the applicable “regional rate” for a nursing home stay.
Seek help with Medicaid planning
Proper preparation for Medicaid eligibility is essential for many in Massachusetts. A nursing home stay can last years and can be very costly. However, through estate planning, it may be possible to afford nursing home care while still preserving a lifetime of savings for your heirs. Trustworthy and experienced attorneys in the fields of estate planning and elder law may be a useful resource. Our firm has three generations of experience in estate planning and we are ready to serve those in the North Shore with their estate planning needs.