It is possible to establish a trust for yourself that will protect your resources from Medicaid nursing care spend-down. This trust has many advantages. With it, it is possible to protect your life savings as an inheritance. With it, it is possible to protect your life savings for the use of the well spouse; that is, the spouse who is at home and not in nursing care. Properly established, this trust is normally outside the reach of the spouses, divorces, and creditors of children.
This trust should be established as soon as there appears to be a potential disability that may lead to nursing care. The best time to act is when the first diagnosis is made. A Medicaid protective trust is often established for a parent who has a diagnosis of Alzheimer’s disease, Parkinson’s disease, senile dementia or other such disability. It is almost always a mistake to delay seeing an elder law/Medicaid attorney, such as Brent.
Don’t let an amateur help you with this.It is easy make serious mistakes. DHS will attack this trust if given the chance. It does not want any additional funds available for the well spouse or to go to the children as an inheritance. A common mistake made by families using this type of trust is to keep strings over the trust. For example, if the trustee has the power to use principal for your benefit, the trust principal will be deemed to be available to you as a resource. This would disqualify you from Medicaid. Or what if the trustee has the power to pay out the income to you or your spouse. Have you considered the consequences? Do you know whether or not the trust income itself will cause you to be disqualified from Medicaid? Will the trust income end up going to pay for the nursing home bill? This trust is for experts only. It should only be prepared for you by an elder law/Medicaid attorney with years of experience, such as Brent D. Coldiron.