It is no secret that nursing home care is expensive, and many people in the Cumming area plan on depending on Medicaid to help fund their nursing home costs when the time comes. To qualify for Medicaid and other government benefits, generally a person must have a low income and few assets. However, does this mean you need to impoverish yourself before you can qualify for benefits, leaving nothing in your estate for your loved ones to inherit? Not necessarily. A special needs trust may be the answer to qualifying for government benefits while still being able to provide for your needs.
What is a special needs trust?
In a special needs trust a person will place their assets in the trust, and the designated trustee to the trust will then manage the trust and provide the person with an income derived from trust funds. This income will not be counted when it comes to eligibility for government benefits, including Medicaid. Special needs trusts are irrevocable, meaning that while the terms cannot be changed, creditors cannot go after the trust assets.
Limits to special needs trusts
It is important to note that if the assets placed in the special needs trust formerly belonged to party whose trust it is, upon their death these assets may be subject to Medicaid’s repayment rules. However, if the assets placed in the special needs trust formerly belonged to a third party, these assets will not be subject to Medicaid’s repayment rules. In addition, special needs trust need to be created before a person turns age 65.
Special needs trusts are complex
Ultimately, special needs trusts can be part of a comprehensive estate plan. However, they are complex legal documents. This post is for informational purposes only, and it does not contain legal advice. Those who are interested in executing a special needs trust may want to discuss their situation with a professional to determine if this is the right estate planning vehicle for them.
