Creating a Funeral Trust May Aid in Medicaid Eligibility
If you're familiar with your state's Medicaid eligibility requirements, you may also be familiar with the phrase "Medicaid Spend Down." If you are not, let me break it down for you.
Medicaid eligibility is determined by an applicant's income and countable assets- both must be under a specified amount.
If the applicant's income or countable assets exceed Medicaid eligibility, they may become eligible by "spending down" income or assets.
Medicaid spend down can be tricky, as Medicaid has a look back period in which past transfers of property, gifted assets or ones sold under fair market value are reviewed.
Creating an irrevocable funeral trust is one way a person can effectively spend down assets. Since the creation of an irrevocable trust is just that, irrevocable, the assets no longer belong to the trustmaker. The funds are no longer a countable asset and are not subject to the Medicaid lookback period, either.
To ensure that your funeral trust is compliant with Medicaid eligibility rules, you should consult with an estate planning or Medicaid attorney. Medicaid lawyers can help seniors obtain assistance with Medicaid application process, which involves filling out extensive paperwork, providing documentation in support of the application, and filing the application.
At Gage-Michaels Law, the assistance of a Medicaid planning lawyer can be invaluable when an applicant’s income or assets are higher than the limits set by the State Medicaid Agency. Your lawyer can strategize with you or a loved one who needs long term care to help them lower their income and assets within an acceptable time frame, and execute the plan once it is finalized. Medicaid planning lawyers can also work in coordination with insurance companies and carriers that provide valuable vehicles such as Medicaid compliant annuities to help a client achieve their financial goals.