Q: I've heard we should consider putting someone's house in trust before you put them in assisted care
- is that the best way to protect the asset?
A: Thanks for your question. The answer likely depends on WHEN they enter assisted care.
The best bet is often to transfer a home into an Irrevocable Medicaid Asset Protection Trust, but there are exceptions (have a spouse in remaining in the home, have an adult child who has been living in the home for at least 2 years who prevented the person from entering a long-term care facility BECAUSE they were that persons caretaker, or they have a disabled child). Additionally, in all other cases, the house must be in the IMAPT for 5 YEARS before the house is fully protected from claims/liens from the long-term care facility for unpaid health care bills.
When most people enter long-term care, they want to apply for Medicaid because IF they qualify, Medicaid pays 100% of long-term healthcare. But, to qualify Medicaid looks DEEPLY into the applicant's finances going back 5 years (known as the 'Medicaid 5-year look-back period'). Any transfers of assets during that 5 years can trigger a 'Medicaid Penalty Period' during which the applicant is ineligible for Medicaid services. Transferring the house into a Trust is still a 'transfer' as far as Medicaid is concerned. So if the person entering the assisted care facility wants to apply for Medicaid, the transfer of the home would likely trigger a Medicaid Penalty Period - of which you can't undo.
So if the person will enter an assisted care facility soon (within 5 years) transferring the home to a Trust is likely NOT the best idea. But if it is unlikely they will enter the facility with 5 years, then transferring into an IMAPT possibly IS a good idea.
It is a complicated subject that requires more than can be discussed here. But, I also wrote a few articles on the subject which you might find helpful - you can find them on my website here: http://www.makilawfirm.com/protect-assets-medicaid/
I hope this was helpful, Thank You for your question, and best of luck!
Justia Ask a Lawyer is a forum for consumers to get answers to basic legal questions. Any information sent through Justia Ask a Lawyer is not secure and is done so on a non-confidential basis only.
The use of this website to ask questions or receive answers does not create an attorney–client relationship between you and Justia, or between you and any attorney who receives your information or responds to your questions, nor is it intended to create such a relationship. Additionally, no responses on this forum constitute legal advice, which must be tailored to the specific circumstances of each case. You should not act upon information provided in Justia Ask a Lawyer without seeking professional counsel from an attorney admitted or authorized to practice in your jurisdiction. Justia assumes no responsibility to any person who relies on information contained on or received through this site and disclaims all liability in respect to such information.
Justia cannot guarantee that the information on this website (including any legal information provided by an attorney through this service) is accurate, complete, or up-to-date. While we intend to make every attempt to keep the information on this site current, the owners of and contributors to this site make no claims, promises or guarantees about the accuracy, completeness or adequacy of the information contained in or linked to from this site.