Many New Yorkers will need long-term care at some point in their lives. Unfortunately, it is prohibitively expensive for most people and can cost thousands of dollars per month. It is possible for some older adults to qualify for Medicaid to pay for the cost, however. One way that middle- and upper-income adults can potentially qualify for Medicaid for long-term care is through Medicaid trusts.
The rules for Medicaid eligibility vary from state to state. Eligibility is determined by reviewing the assets and income of the people who need long-term care. If they are over the threshold, they will not qualify for Medicaid. However, people can conduct Medicaid planning so that they can qualify for Medicaid when the time comes.
Medicaid trusts are irrevocable trusts that can be set up to hold the assets and excess income of people who want to qualify for Medicaid. People can transfer assets to the trust. Since the trusts are irrevocable, this means that the trust owns the assets instead of the people so that they are not counted against them. Medicaid has a five-year look-back period for transfers, however, which makes advance planning important.
Adults who are in their 50s and 60s and who believe that they might need long-term care in the future might want to discuss their options with elder law attorneys. Such attorneys could assist their clients by setting up trusts to shield their assets so that they can qualify for Medicaid if and when they need long-term care. The lawyers might work with their clients so that they do not make transfers that violate the look-back rules.