I have an aunt who put her large property into a trust for her kids. It's worth $500,000 now. She is nearly 100 years old and has now outlived her cash assets so her kids are now on the hook for funding her nursing home fees or putting her on Medicaid.
I believe if you have the assets to pay for your living expenses you should use them for that purpose! Why should the state pay for your upkeep just because you "want to leave something for the kids?"
And be warned, Medicaid doesn't pay for Assisted Living, and once in a Medicaid approved facility Mom will likely be in a small shared room. Medicaid is a charity, not a right.
It is so true, and I certainly do, myself, question people attempting to "protect the assets" of their elders with these trusts, while they let the elders go onto Medicaid and the poorer quality of life it provides. They are protecting the assets, all right! They are protecting them for THEMSELVES. I think it is quite sad myself. I caution all approaching age to avoid irrevocable trusts so that your children can have your assets that you may live a SHORTER life, but certainly not a happier one.
If you had the choice would you like your mother placed in a facility you have visited and approved of using funds she has or do you want her in a Medicaid one where you may not be able to choose the facility or its location?
Speak to a trust attorney. How can I protect my mom's assets? " " " from Medi-caid? Where are her assets now? tell attorney. Ask him if / where you should move them i.e., CDs, etc. What does a trust do that other financial options don't do? What is the return / percentage of investment in a trust - is there one, like on CDs or a bank that gives interest? Is there a penalty to changing a trust? Who has access to it? (the trust) - just the person setting it up or are there beneficiaries (or others) that can change it at will? Will my mom need to be on a limited income to retain her MediCaid? Is it $2,000 a month or less, or is that something else? Do I need a fiduciary or can I (you) be-come one? What does a fiduciary do / legal responsibilities and rights?
Will my mom owe MediCaid anything from her trust when she transitions (dies)?
Does MediCaid need to know that my mom's asset are in a trust? Should I leave some in a credit union or bank?
I think I'm with the majority here. The reason why a person is on Medicaid is because they can no longer afford to pay for daily expenses anymore. Medicaid is administered by the state, however, yours and everyone else's tax dollars are ultimately paying for this welfare.
I think you need to talk to an estate/elder attorney and be upfront and direct with your question. The question I would ask the attorney, and it is not associated with Medicaid, is, if my mother is alive and unable to make decisions (e.g. in a coma or in memory care) and we need to sell or do something with the items in the trust, what do we need to put into the trust so that someone can do that without her signature.
My understanding is that the reason for the trust, is to determine the ownership and succession plan of the asset while the owner is alive, and when they pass. In my state, putting an asset in a trust, means that one cannot put another person on the title or account. For instance, one of my Mom's bank accounts is in a trust, which means that she cannot have a joint ownership on that bank account. The trust dictates who can gain access to those assets and under what conditions, should something happen to the primary trustee.
The tougher part of your question is that since Medicaid is administered by the state, each state gets to decide what will be considered and what won't be considered in the decision of Medicaid. Therefore, if she were to move from one state to another, she could be eligible in one state and not be eligible in another state. Also, the rules can change over time.
The best way to ensure assets are protected from Medicaid, would be for her to not own the assets in the first place. This is because when an asset is sold, there is a high likelihood that the sale would trigger additional income that would make the person ineligible for Medicaid.
From reading some of the responses here I'm not sure everyone understands what the rules and qualifications are for becoming eligible for Medicaid (LTC kind of Medicaid) and what is allowed as far as assets and how trusts come into play. I don't have all the answers either, but I'm pretty sure that if you want to protect your assets and leave them to you kids or others, you must transfer those assets into an irrevocable trust at least 5 years before you need long term care Medicaid. If you don't meet that 5 year lookback period Medicaid will not approve you or give you a penalty that you must pay before Medicaid will pay for your care. Medicaid will allow you to set up a trust for funeral and burial expenses however (up to a certain amount), so for that it may be useful for an attorney to set that up for you. There are also laws to protect the spouse or possibly a disabled child to be able to stay in the home and have a portion of the LO's income go to them instead of the nursing home. Other than that, you really can't "cheat" the system. You really can't "protect" mom's assets. They will be used for her care, unless she transfers those assets to an irrevocable trust at least 5 years prior to needing nursing home, and in that case, what you are really doing is protecting your own inheritance at the expense of having better care/comfort for mom when she needs it.
Some people feel resentful because they believe they worked hard and scrimped and saved, and now all that money is in jeopardy of being used up quickly for nursing care, while others who weren't so frugal or didn't earn enough money in decent paying jobs, or maybe squandered away their money on drugs, alcohol or gambling are able to get Medicaid. I get it. You at least however can benefit from your savings by having more comfortable private pay facilities available to you for some period of time.
Is your mother already in a Medicaid SNF? You need to consult an elder law attorney who will advise you whether a trust can protect your mom’s asset.
Just a FYI. Be aware that if your mom has a trust, Medicaid will scrutinize that trust to make sure that your mother isn’t hiding funds from elsewhere in that trust. People have been known to hide money in a trust believing that Medicaid will not find out about it. An example of this is that people might come into a cash inheritance and they don’t want Medicaid to know about it so they hide the cash in their trust. My daughter works for Medicaid DDD/nursing home and she requires information about the trust to make sure no other money source is being hidden in the trust. We need to understand that upon the death of our loved ones, Medicaid will seek reimbursement of funds it paid out to take care of our loved ones while they were alive. Medicaid is not a “free” program; it’s a program for people with very limited income and resources. In order for Medicaid to survive, it has to seek reimbursement of funds it pays out. If there is no fund upon a loved one’s death then Medicaid cannot be reimbursed.
A little story to put things in perspective: A 90+ year old lady used to come to the Food Stamp office in my town. Based on her social security amount, she was eligible for 10-15 in food stamps. She was happy to get it; said it paid for milk and bread. A couple of years into it, we got a report that she had $100-150K in a savings account because of income match-ups from IRS. Had to tell her she had too much money in the bank to continue getting Food Stamps. Her reply: I was saving that for my old age.
At some point in time, we all arrive at the 'old age' mark. About the same time, there's usually more medical bills and cost of living goes up. That's when you dip into the savings to cover the cost of being top-side of the dirt. Kids are not owed an inheritance. They have to do what mom and dad did to create a nest egg. Without the nest egg they have to apply for social services to help them navigate their needs expenses.
Hope she didn't need more than 1 to 2 years care in a SNF because that is all 100,000 to 150,000 will pay for. Less is she chose to stay in her home with full time care. She was smart to be frugal. Current regulations aren't in line with the amount of money that needs to be saved for retirement. That, or we all need to keep working til we drop, for those that are able, that is. My aunt had to go on medicaid because she lived to almost 104 (died last year) and vastly outlived savings accumulated during their working years. Her husband, born in the same year as her lived to age 99. They could not even begin to foresee what care costs currently run in the years they were working and saving for retirement.
There are specific strategies that can (potentially) allow a you to protect some of her income and/or savings. There is good advice here, but nothing takes the place of a CELA familiar with your State rules. IMO it's crazy not to at least explore the possibility of getting help with care costs which are skyrocketing.
PS: In 2024 in California they are completely eliminating the asset limits and will only consider income. Every state is different of course.
It is difficult to understand the comments about "the taxpayers being on the hook." Presumably at some point, the loved one was also one of those "taxpayers." They paid into the system, like everyone else, and in many cases paid more into "the system" than others. Then, because in some manner they have been successful (whether on their own or by some other form of inheritance), "the system" says "you will not benefit from the system you paid into." You will go bankrupt paying for your own care and leave nothing for your family. You played by the rules. You did well........congratulations.......here is a giant "raspberry" from "the system." So crazy....a legalized form of a Ponzi scheme.....pay in with the promise of future benefit.......and then when you get there, there is nothing for you. Sorry, but if you paid into "the system" like everyone else, you should benefit from "the system." You and your family should not be penalized because you have done well in some manner. It is a complicated, difficult system that is stacked against those who do well for themselves. That is why people "play the game." That is why there are attorneys who specialize in this kind of thing.....because the system is set up for people to "play it" by the rules and benefit from "the system" they paid into. Usually the people who get stuck are the ones in the middle. The ones with nothing have nothing to lose. The ones with a lot can afford to pay for attorneys, hide their assets (legally according to the rules) and not get stuck with nothing in the end. It is the ones in the middle that really get stuck. Just enough assets to take care of the loved one for awhile but not enough to find ways to legally shelter the funds. You spend and spend on the care and drain the resources you have before you ever have an opportunity to benefit from the system that you paid into. So, I don't really understand all of the comments about "the taxpayers" footing the bill.........."we have met the taxpayer, and it is us." I would really have more interest in hearing why people believe that it is okay for people to pay into the system for years and then get punished at the end of their lives because they have done well and played by the rule.
Medicaid is a health insurance program for the poor. It is not a welfare program to allow rich people to give their money to their family members while the taxpayers are on the hook to pay their bills.
BTW - there is no Medicaid tax. Medicaid is paid for out of the general state tax fund with grants from the Federal government. You are not actually paying any Medicaid tax your whole life.
What you are talking about is a universal health insurance program. Everybody pays in and everybody gets the benefit. I am all for universal health care, but due to certain political parties that whine about socialism every 10 seconds, that is not what we have in this country. And until we do have it, people are going to have pay their own freight until their funds run out.
Essentially you are asking us, we taxpayers, to give you a way to keep your mother's assets from paying for her care while WE the taxpayers pay for her care?
Yes, there are definitely attorney's out there who will, for their OWN share of the pot, help you to "protect" or "hide" assets in special trusts. They are tricky. Not the attorneys, necessarily, but the trusts. So take care that, in "protecting" you don't lose a lot. I wish you well.
The best way to handle this matter is to: (1) find a certified eldercare attorney; and (2) tell her or him that you do not know anything about qualifying your mom for Medicaid, so you need their guidance. Let them take over and guide you.
Yes, a trust can protect assets from Medicaid - However, it is not a straightforward process. There are restrictions as to the trust, to the healthy partners assets, if there is one, etc. You need to talk to an elder law attorney. However, make sure you have the attorney give you the full details of what to expect, what your responsibilities are, the total cost, when the process actually begins etc., prior to and after being qualified for Medicaid. Ask questions! Depending on the age of the patient and her partner, plus the amount of assets and time involved, you need to weight the value of the cost of legal fees and what you'll be expected to do exactly, in order to become Medicaid qualified. It is a complicated process, you need to know, up front what to expect - make sure, if you decide to go with it, that the attorney is a well known, highly recommended, well respected firm.
I’m not sure even with DPOA you can set up a trust for her if she has dementia. The trust will own the assets and the trustee (your mom) has the powers of administration over the assets in the trust. This also means she can use the assets, sell them, add to it (if it’s revocable), and assign beneficiaries of the assets free of the trust for when she is gone. You can be co-trustee, but I’m not sure if you can set it up in the first place.
There is also revocable and irrevocable trusts, so it’s important to speak to a well qualified trust and estates attorney to walk you through it all.
My father had a revocable trust. Now that he has passed I am the trustee of the trust (meaning I control the assets) , the executor (meaning I have to follow his wishes in the trust to make sure beneficiaries get what he left them) and the beneficiary of much of it. He left one property out of the trust and by the time we realized it he had an ALZ diagnosis. Even with my DPOA I was not able to add the property to the trust. I would have had to petition the court to do so and doing that was just as expensive as probate so I didn’t bother.
I believe that only Irrevocable trusts protect assets from Medicaid, so make sure you understand what that is.
Not sure with Dementia Mom can set up a trust. She has to understand what she is doing. Do you have POA? If so, see if it gives you the ability to set up a trust. IMO if it does, its kind of a conflict of interest, meaning you profit from the trust not her.
If your Mom needs Memory care, then its too late for a Trust. And I would so rather her spend her money on a nice place to live, then be on Medicaid. My Mom was in her last stage of Dementia when she entered LTC. It was a nice place and she was well cared for. She paid privately for 2 months and then she went on Medicaid. She was not in her room during the day because she was out in the common area. She only slept in her room at night. So I did not say much when she was transferred to a 4 bed room. Medicaid they must have a 2 bed room at least.
In my State if you pay for an AL or MC for at least two years, you can apply for Medicaid if you have no more money for your care and stay in that facility but the facility has to except Medicaid. So find out what your State allows in Medicaid paying for MCs. If like my State, then find a facility that excepts Medicaid that way Mom does not have to move.
This is so hard. I'm looking at memory care for mom right now and want to put her money toward her care, but I'm so worried about it running out and then having to turn her life upside down again to find Medicaid funded care when her money is all gone.
When it gets closer to needing Medicaid you will find a place for her before funds run out. I would advise finding a geriatric care specialist for a couple of consultations to put you on the right path
igloo572 1 hour ago Please pay attention as to what is being considered a “Trust”.
Asset Protection Trusts traditionally are a legal structure set up to enable assets to bypass probate & taxes. It’s estate planning. Trust owns assets; can have homes, land, etc titled in the Trust. Usually financial institutions need for Trusts to have as a baseline over 1M so that there is $ within Trust for investments that “feed” the Trust to pay costs that arise for titled assets. Like your great Aunt had a Trust with her home titled into it Trust but also stocks and oil royalties as well. Stocks & royalties as investments pay for costs (taxes, insurance, maintenance) on house & paid her $ periodically. Auntie died and she did the Trust to go to you as beneficiary so you can stay at the house & you too can get $ periodically. Those stocks “feed” it $ & hopefully Trust does this for your kids. It’s Asset Protection & what intergenerational wealth in the US is based on.
This is the type of Trusts associated with wealth & security. With Trustees, tax filings, attorneys & financial institutions. But there are other kinds of Trusts…..
Like SNT = Special Needs Trusts set up for those with disabilities. Done by attorneys or by outreach groups.
Testamentary Trusts - in a will for how distribution of assets to be done.
IFT = Irrevocable Funeral Trusts. Often sold under different names, & what they seem to be are basically a type of life insurance policy that you buy to have preneed funeral or burial space that is placed into a contract funded Trust drawn upon to pay for funeral / burial once you die. It’s IRREVOCABLE, so once bought, $ is gone completely. The $ goes to the funeral stuff only, so you need it for something else, too frickin’ bad. Most State LTC Medicaid have a maximum $ allowed on IFT. & States can have other restrictions on them as well. Like TX has 15K max, a specific Goods & Services list and all $ not used MUST escheat (be sent) to the State. It’s an insurance product so often touted as being at no fee, which it is, as insurance policies usually paid via a commission. Ask for in writing - exactly- the commission structure on the premium. You may be surprised how high it is.
PNA trust - Personal Needs Allowance trust. The $ an individual in a NH on LTC Medicaid is allowed to keep from their income each month to use for items not covered by Medicaid (snacks, magazines, beauty shoppe). If NH is their representative payee for SS, PNA $ is required to be placed into a trust account at the NH with interest paid. It’s actually called an “Trust” although it can be a small amount of $. PNA varies by State. Like AL & NC are low at $30 a mo, AZ is high at $137.10. NYS is $50 mo. All other income is a copay as the required SOC share of cost to the NH. POA does need to be mindful of PNA trust $ as count towards assets. Assets have max allowed per mo & amount depends on your State.
If you’re not sure IF it’s something being touted as a TRUST is ok for LTC Medicaid, that’s something to get clear answers from your moms Medicaid caseworker in advance. If there is an issue, it’s an eligibility problem for her, not for whoever sold you the product. AND super important to know difference between revocable versus irrevocable. Could be a huge & costly mistake.
I guess I'm "sanctimonious" and "out of my financial mind" bc I chose to use my parents savings for excellent private care in AL and then Memory Care Assisted Living for mom. Even though the 5 year look back had expired in 2019 and I could have applied for Medicaid for mom, I did everything in my power to AVOID that bc she'd have had a roommate and shared bathroom in a SNF which she'd have hated, etc. The result was that I got no inheritance but my folks received the best of care and mom had private accommodations and total dignity until the day she died in 2022. So did dad.
Your Mom's assets stand to give your Mom the care she needs. Protecting assets for future generations while the taxpayer pays the bill isn't necessarily the way to go, and folks often get in deep weeds trying to protect assets with Trusts and with irrevocable trust which I call "Giving away the farm".
So don't go to some seminar with someone to sell you something. Instead get a certified elder law attorney would be step A. The attorney has a LEGAL FIDUCIARY responsibility to help you and not to misguide you.
Then take in all your Mom's assets and all the details of your Mom. Her age, her condition mentally and medically, her needs now and forseen in future.
Then you ask what protective paperwork she needs to have for herself, and what recommendations he has for her given her future plans in so far as she is able to foresee them (knowing that the UNforeseen will always be hiding in the shadows.
The attorney will guide you with questions. Just have all Mom's info with you.
If you think your mother can hold out independently for another five years (the usual lookback period in most states), then do it NOW, ASAP, and follow your financial planner’s advice about socking away the $$$ somewhere safe! If she is in imminent need of being put somewhere, though, you are out of luck, and will have no option other than draining her every cent for care. Then applying for Medicaid, when there is nothing left. Please, sanctimonious commenters, no sermons about the taxpayers, yatatata…everyone in their right (financial) mind “games the system”.
I know it stinks not to be able to inherit the family home or the money, that's how life is supposed to work. We pay for our own care until we no longer have the resources.
We do not ask the taxpayer to pay for it so our children can get money later. This is why no financial planner will allow you to add an expected inheritance into your future plans.
Please don't read the previous comments and think negatively about putting your mom's assets in an irrevocable trust or whatever your attorney suggest. First your parents have paid many years into the "system", second, wherever you put her it has to be a medicaid approved and they will take all her monthly income when she is approved so she will still be paying. Third, not all medicaid facilities are horrible. My mom is in one and we pay out of pocket because it is wonderful, full of loving nurses and CNA's who take time and help mom. She is happy and that is what matters. My dad built my parents home with his own hands. He saved long and worked hard his whole life and I will NOT see it sold if I can help it. You do you and don't judge like these others.
I believe if you have the assets to pay for your living expenses you should use them for that purpose! Why should the state pay for your upkeep just because you "want to leave something for the kids?"
And be warned, Medicaid doesn't pay for Assisted Living, and once in a Medicaid approved facility Mom will likely be in a small shared room. Medicaid is a charity, not a right.
How can I protect my mom's assets?
" " " from Medi-caid?
Where are her assets now? tell attorney.
Ask him if / where you should move them i.e., CDs, etc.
What does a trust do that other financial options don't do?
What is the return / percentage of investment in a trust - is there one, like on CDs or a bank that gives interest?
Is there a penalty to changing a trust?
Who has access to it? (the trust) - just the person setting it up or are there beneficiaries (or others) that can change it at will?
Will my mom need to be on a limited income to retain her MediCaid?
Is it $2,000 a month or less, or is that something else?
Do I need a fiduciary or can I (you) be-come one?
What does a fiduciary do / legal responsibilities and rights?
Will my mom owe MediCaid anything from her trust when she transitions (dies)?
Does MediCaid need to know that my mom's asset are in a trust?
Should I leave some in a credit union or bank?
Gena / Touch Matters
I think you need to talk to an estate/elder attorney and be upfront and direct with your question. The question I would ask the attorney, and it is not associated with Medicaid, is, if my mother is alive and unable to make decisions (e.g. in a coma or in memory care) and we need to sell or do something with the items in the trust, what do we need to put into the trust so that someone can do that without her signature.
My understanding is that the reason for the trust, is to determine the ownership and succession plan of the asset while the owner is alive, and when they pass. In my state, putting an asset in a trust, means that one cannot put another person on the title or account. For instance, one of my Mom's bank accounts is in a trust, which means that she cannot have a joint ownership on that bank account. The trust dictates who can gain access to those assets and under what conditions, should something happen to the primary trustee.
The tougher part of your question is that since Medicaid is administered by the state, each state gets to decide what will be considered and what won't be considered in the decision of Medicaid. Therefore, if she were to move from one state to another, she could be eligible in one state and not be eligible in another state. Also, the rules can change over time.
The best way to ensure assets are protected from Medicaid, would be for her to not own the assets in the first place. This is because when an asset is sold, there is a high likelihood that the sale would trigger additional income that would make the person ineligible for Medicaid.
Some people feel resentful because they believe they worked hard and scrimped and saved, and now all that money is in jeopardy of being used up quickly for nursing care, while others who weren't so frugal or didn't earn enough money in decent paying jobs, or maybe squandered away their money on drugs, alcohol or gambling are able to get Medicaid. I get it. You at least however can benefit from your savings by having more comfortable private pay facilities available to you for some period of time.
Just a FYI. Be aware that if your mom has a trust, Medicaid will scrutinize that trust to make sure that your mother isn’t hiding funds from elsewhere in that trust. People have been known to hide money in a trust believing that Medicaid will not find out about it. An example of this is that people might come into a cash inheritance and they don’t want Medicaid to know about it so they hide the cash in their trust. My daughter works for Medicaid DDD/nursing home and she requires information about the trust to make sure no other money source is being hidden in the trust. We need to understand that upon the death of our loved ones, Medicaid will seek reimbursement of funds it paid out to take care of our loved ones while they were alive. Medicaid is not a “free” program; it’s a program for people with very limited income and resources. In order for Medicaid to survive, it has to seek reimbursement of funds it pays out. If there is no fund upon a loved one’s death then Medicaid cannot be reimbursed.
At some point in time, we all arrive at the 'old age' mark. About the same time, there's usually more medical bills and cost of living goes up. That's when you dip into the savings to cover the cost of being top-side of the dirt. Kids are not owed an inheritance. They have to do what mom and dad did to create a nest egg. Without the nest egg they have to apply for social services to help them navigate their needs expenses.
My aunt had to go on medicaid because she lived to almost 104 (died last year) and vastly outlived savings accumulated during their working years. Her husband, born in the same year as her lived to age 99. They could not even begin to foresee what care costs currently run in the years they were working and saving for retirement.
PS: In 2024 in California they are completely eliminating the asset limits and will only consider income. Every state is different of course.
BTW - there is no Medicaid tax. Medicaid is paid for out of the general state tax fund with grants from the Federal government. You are not actually paying any Medicaid tax your whole life.
What you are talking about is a universal health insurance program. Everybody pays in and everybody gets the benefit. I am all for universal health care, but due to certain political parties that whine about socialism every 10 seconds, that is not what we have in this country. And until we do have it, people are going to have pay their own freight until their funds run out.
Essentially you are asking us, we taxpayers, to give you a way to keep your mother's assets from paying for her care while WE the taxpayers pay for her care?
Yes, there are definitely attorney's out there who will, for their OWN share of the pot, help you to "protect" or "hide" assets in special trusts. They are tricky. Not the attorneys, necessarily, but the trusts. So take care that, in "protecting" you don't lose a lot. I wish you well.
Depending on the age of the patient and her partner, plus the amount of assets and time involved, you need to weight the value of the cost of legal fees and what you'll be expected to do exactly, in order to become Medicaid qualified.
It is a complicated process, you need to know, up front what to expect - make sure, if you decide to go with it, that the attorney is a well known, highly recommended, well respected firm.
There is also revocable and irrevocable trusts, so it’s important to speak to a well qualified trust and estates attorney to walk you through it all.
My father had a revocable trust. Now that he has passed I am the trustee of the trust (meaning I control the assets) , the executor (meaning I have to follow his wishes in the trust to make sure beneficiaries get what he left them) and the beneficiary of much of it. He left one property out of the trust and by the time we realized it he had an ALZ diagnosis. Even with my DPOA I was not able to add the property to the trust. I would have had to petition the court to do so and doing that was just as expensive as probate so I didn’t bother.
I believe that only Irrevocable trusts protect assets from Medicaid, so make sure you understand what that is.
If your Mom needs Memory care, then its too late for a Trust. And I would so rather her spend her money on a nice place to live, then be on Medicaid. My Mom was in her last stage of Dementia when she entered LTC. It was a nice place and she was well cared for. She paid privately for 2 months and then she went on Medicaid. She was not in her room during the day because she was out in the common area. She only slept in her room at night. So I did not say much when she was transferred to a 4 bed room. Medicaid they must have a 2 bed room at least.
In my State if you pay for an AL or MC for at least two years, you can apply for Medicaid if you have no more money for your care and stay in that facility but the facility has to except Medicaid. So find out what your State allows in Medicaid paying for MCs. If like my State, then find a facility that excepts Medicaid that way Mom does not have to move.
This is so hard. I'm looking at memory care for mom right now and want to put her money toward her care, but I'm so worried about it running out and then having to turn her life upside down again to find Medicaid funded care when her money is all gone.
I appreciate everyone's thoughtfulness. 🙏
igloo572
1 hour ago
Please pay attention as to what is being considered a “Trust”.
Asset Protection Trusts traditionally are a legal structure set up to enable assets to bypass probate & taxes. It’s estate planning. Trust owns assets; can have homes, land, etc titled in the Trust. Usually financial institutions need for Trusts to have as a baseline over 1M so that there is $ within Trust for investments that “feed” the Trust to pay costs that arise for titled assets. Like your great Aunt had a Trust with her home titled into it Trust but also stocks and oil royalties as well. Stocks & royalties as investments pay for costs (taxes, insurance, maintenance) on house & paid her $ periodically. Auntie died and she did the Trust to go to you as beneficiary so you can stay at the house & you too can get $ periodically. Those stocks “feed” it $ & hopefully Trust does this for your kids. It’s Asset Protection & what intergenerational wealth in the US is based on.
This is the type of Trusts associated with wealth & security.
With Trustees, tax filings, attorneys & financial institutions.
But there are other kinds of Trusts…..
Like SNT = Special Needs Trusts set up for those with disabilities. Done by attorneys or by outreach groups.
Testamentary Trusts - in a will for how distribution of assets to be done.
IFT = Irrevocable Funeral Trusts. Often sold under different names, &
what they seem to be are basically a type of life insurance policy that you buy to have preneed funeral or burial space that is placed into a contract funded Trust drawn upon to pay for funeral / burial once you die. It’s IRREVOCABLE, so once bought, $ is gone completely. The $ goes to the funeral stuff only, so you need it for something else, too frickin’ bad. Most State LTC Medicaid have a maximum $ allowed on IFT. & States can have other restrictions on them as well.
Like TX has 15K max, a specific Goods & Services list and all $ not used MUST escheat (be sent) to the State. It’s an insurance product so often touted as being at no fee, which it is, as insurance policies usually paid via a commission. Ask for in writing - exactly- the commission structure on the premium. You may be surprised how high it is.
PNA trust - Personal Needs Allowance trust. The $ an individual in a NH on LTC Medicaid is allowed to keep from their income each month to use for items not covered by Medicaid (snacks, magazines, beauty shoppe). If NH is their representative payee for SS, PNA $ is required to be placed into a trust account at the NH with interest paid. It’s actually called an “Trust” although it can be a small amount of $. PNA varies by State. Like AL & NC are low at $30 a mo, AZ is high at $137.10. NYS is $50 mo. All other income is a copay as the required SOC share of cost to the NH.
POA does need to be mindful of PNA trust $ as count towards assets. Assets have max allowed per mo & amount depends on your State.
If you’re not sure IF it’s something being touted as a TRUST is ok for LTC Medicaid, that’s something to get clear answers from your moms Medicaid caseworker in advance. If there is an issue, it’s an eligibility problem for her, not for whoever sold you the product.
AND
super important to know difference between revocable versus irrevocable. Could be a huge & costly mistake.
It was her money and I used it for her care.
She deserved the best.
I’ve never had the slightest regrets about her care or the money I wasn’t able to collect for myself.
So don't go to some seminar with someone to sell you something. Instead get a certified elder law attorney would be step A. The attorney has a LEGAL FIDUCIARY responsibility to help you and not to misguide you.
Then take in all your Mom's assets and all the details of your Mom. Her age, her condition mentally and medically, her needs now and forseen in future.
Then you ask what protective paperwork she needs to have for herself, and what recommendations he has for her given her future plans in so far as she is able to foresee them (knowing that the UNforeseen will always be hiding in the shadows.
The attorney will guide you with questions. Just have all Mom's info with you.
That would be my personal recommendation.
I know it stinks not to be able to inherit the family home or the money, that's how life is supposed to work. We pay for our own care until we no longer have the resources.
We do not ask the taxpayer to pay for it so our children can get money later. This is why no financial planner will allow you to add an expected inheritance into your future plans.