Medicaid Planning

A home is often one of the most valuable items of property that someone will ever own. When it comes to ensuring that your home passes to the individual or group that you intend, there are a variety of ways to legally make that happen. The life estate is a less commonly used method.

Yes! Everyone needs a will, trust, or both to ensure your legacy is passed on in the way you intend, to provide for children, spouse, and family members, and in the case of trusts, to avoid probate. Wills and trusts are not just for the wealthy: A well-drafted plan ensures that what you do have is not wasted in probate court, establishes your intentions for sentimental items and family heirlooms, and can even state your wishes for the care of pets. 

Almost everyone has a digital presence now: Estate planning can also help ensure your online photos, records, and accounts do not disappear. If you were in a Medicaid-funded nursing home at the end of your life, a trust may also prevent or limit Medicaid-recovery states from emptying remaining bank accounts or forcing the sale of the family home to pay back nursing home costs. If you have a retirement account or IRA, a trust can also ensure that your beneficiaries are not hit with a huge tax burden when the funds are distributed.
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There are many factors to consider when deciding whether or not to implement Medicaid planning.  If you’re in good health, now would be the prime time to do this planning. The main reason is that any Medicaid planning may entail using an irrevocable trust, or perhaps gifts to your children, which would incur a five-year look back for Medicaid qualification purposes. The use of an irrevocable trust to receive these gifts would provide more protection and in some cases more control for you.

As an example, if you were to gift assets directly to a child, that child could be sued or could go through a divorce, and those assets could be lost to a creditor or a divorcing spouse even though the child had intended to hold those assets intact in case they needed to be returned to you.
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