Question: Why would one use a Trust to help plan for long term care?
Answer: Planning for long-term care involves the consideration of many factors. There are a number of reasons that trusts can be used as part of an individual’s long-term care plan. Sometimes an individual may place assets inside of a revocable living trust. If the individual becomes incapacitated, the trustee will have the ability to manage the trust assets immediately, and those assets can be used for the care of the individual. Revocable trusts are more commonly used as part of planning for an individual’s death to deal with issues such as probate (or multi-state probate), or privacy.
Irrevocable trusts are more commonly used in planning for an individual’s long-term care. If an individual does not have a long-term case insurance policy, they are self-insured for any long-term care needs they may have. That means it is up to the individual to pay for all of the costs associated with long-term care. Medicaid is the federally-funded, state-implemented program which pays the costs of long-term care for individuals who qualify. To qualify for Medicaid, an individual must generally have a very limited amount of assets in his or her name.
Irrevocable trusts can be used, either alone or in conjunction with other planning strategies, to reduce the amount of assets in an individual’s name for Medicaid purposes. By transferring assets into an irrevocable trust, that individual may qualify for Medicaid sooner; and at 5 years after the time of the transfer into the irrevocable trust, those assets are protected from having to be spent on long-term care. The Medicaid rules are very complex, and implementing a planning strategy using trusts should only be done with a qualified elder law attorney to avoid any potential planning failures or pitfalls.
If you need help with this or other elder care / senior care legal matters, you can find thousands of Elder Care Professionals from across America on ElderCareMatters.com – America’s National Directory of Elder Care / Senior Care Resources for Families.
You can also find Elder Law Attorneys on ElderLawAttorneys.us and Estate Planning Attorneys on EstatePlanningAttorneys.us – 2 additional websites sponsored exclusively by the national ElderCare Matters Alliance.
James J. Ruggiero, Jr., Esq.
Ruggiero Law Offices, LLC
An ElderCare Matters Partner
If you need answers to your elder care questions, send your questions to us at:
Answers are provided by our ElderCare Matters Partners, some of America's TOP Elder Care Professionals who have years of experience in helping families plan for and deal with a wide range of Elder Care / Senior Care Services.
All Q&A's are posted on the homepage of ElderCareMatters.com
If you help familes plan for or deal with elder care matters, then you owe it to yourself and to families across America to become a professional member of the National ElderCare Matters Alliance and to be listed on the many Elder Care / Senior Care Directories that are sponsored by this National Alliance of Elder Care Professionals.
For additional information about professional membership in the National ElderCare Matters Alliance, (including the many benefits of becoming one of our ElderCare Matters Partners) and to download an Application for your Basic, Premium or Partner Membership in the National ElderCare Matters Alliance, visit: ElderCare Matters Alliance.