Q: Was my dad's Income Only Medicaid Asset Protection Trust a good idea? Need to use trust income to pay for elder care.
About 6 years ago, my dad went into an assisted living facility and, AT THAT TIME, a lawyer put most of his assets in an Irrevocable Income-Only Medicaid asset protection trust. At the time, costs were reasonable ($3500/month) and he had a good Long Term Care policy. My dad went through with this plan. Well, 3 years ago, he had to move to a higher level of care assisted living facility ($7500 / month) and his LTC policy is now exhausted. In 2 years, he will be out of personal assets. I'm worried that the lawyer's plan isn't working as expected. She seemed to have anticipated him staying in the cheaper facility for much longer and then going to a Medicaid accepting nursing home if his health got worse. She didn't seem to anticipate his current situation, where he needed a higher level of care assisted living home, but not nursing. Is this an uncommon situation? What is the typical advice?
Except in California (where the lookback period is only 2.5 years), the Medicaid lookback period is 5 years. That means Medicaid pre-planning must be done at least 5 years in advance of the need for long-term care. When it comes to Medicaid pre-planning, an accurate crystal ball is extremely helpful, but nobody seems to have one that works, so all we can do is hope for the best.
Yes, it does happen that the Medicaid pre-planning client does not quite make it a whole five years before needing long-term care. When that happens you should go back to the attorney that did the planning and ask what the next step is. He or she did not do anything wrong, so you are not approaching the attorney to berate him or her. The attorney has a pretty detailed file and can re-calculate numbers based upon the current situation and make a recommendation. Number crunching is required to determine what makes the most sense financially. It might be best to private pay until the 5 year mark is reached and then apply for Medicaid. Or, it might make sense to "undo" the planning (gift everything back) and then do crisis planning using different techniques.
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.