If Medicaid ends up needing to pay for your nursing home care, the government will seek to take any assets that you have to pay for its costs. You might be able to create a trust to get around that problem.
One of the realities of aging in America, is that people who need to stay in long-term nursing home care cannot pay for their stays without losing all of their assets. There is nothing left for their children to inherit. They spend everything they have left, and only then will the government pay for their care through Medicaid.
If the elderly person has a home, the government will even seek to claim that and sell it after no one else is living there. That creates an awful feeling for many elderly parents, because they have nothing to leave their families.
There are some ways around this problem, including using a certain type of trust as the Times Herald-Record discussed in “Benefits of Medicaid Asset Protection Trust.”
A Medicaid Asset Protection Trust is a trust that set up specifically to protect assets from Medicaid, while still qualifying an elderly person for Medicaid assistance with long-term care. These are irrevocable trusts and any assets put into them at least five full years before applying for Medicaid are protected. The trusts are not perfect, since the trust settlors cannot use any of the principal in the trusts. However, income can be used.
If you are interested in a Medicaid Asset Protection Trust, talk to an elder law attorney about one and other options you might have.
Reference: Times Herald-Record (March 8, 2018) “Benefits of Medicaid Asset Protection Trust.”