You may have heard of a Medicaid Trust but maybe you aren't sure why you would need one of if you even need one at all. Consider these three factors.
A Medicaid Trust protects your assets from depletion. Long term care is a looming reality for most Americans and can deplete even the most significant estate pretty quickly. A Medicaid trust allows you to hold your assets outside the reach of the government as you age. It allows you to preserve your estate and still be eligible for any benefits you might need.
That said, a Medicaid Trust is only effective if assets are transferred into the trust more than 5 years before any benefits are needed. Assets transferred in less than 5 years may impact your eligibility for this benefit and could lead to penalty if not properly disclosed.
However, unlike other financing options, a Medicaid Trust pays for itself. Options such as long term care insurance can easily cost tens of thousands of dollars a year. A Medicaid Trust drafted by an attorney is just as effective for only a fraction of the cost.