The idea of placing a loved one in nursing care is an uncomfortable one for many people, for good reason. First, you’re trusting strangers — medically-qualified healthcare professionals but still strangers — with the day-to-day and long-term care of your beloved mother, father or elderly relative. Second, there are horror stories about nursing homes, like taking the resident’s property and selling it off to pay for an other’s needs, leaving your family member with nothing.
Some people have turned to the idea of living trusts in an effort to avoid these things. You may wonder, justifiably so, “Can Medicare seize a trust?”. Learn about how Medicare and Medicaid work in conjunction with trusts to protect your senior relative, and how a qualified Montana trusts attorney can help.
Medicare vs. Medicaid
The first thing to establish is that there is a difference between Medicare and Medicaid. Medicare is a form of health insurance available to seniors, paying for rehabilitative care for up to 100 days and only so long as the person is making rehabilitative progress. Medicare, like any insurance plan, has copays and deductibles that have to be paid. Without supplemental insurance, these can be substantial and can create financial difficulties. Medicare Advantage HMOs can help to offset these, depending on the individual plan.
Medicaid, on the other hand, is supplemental insurance designed for low-income recipients and can help to pay for long-term nursing care, but only if the senior in question meets strict criteria and is qualified. Medicaid only kicks in if the person has limited assets and a very low income. The law requires that existing assets be spent down until the eligibility threshold is met.
Spending Down Assets
It is this “spending down assets” requirement that generates the stories about homes and estates being seized. The rules for how these assets can be spent can be very tricky and complex, and making the wrong move can actually put you at odds with the IRS, a position in which nobody wants to find themselves.
Will Medicare Seize a Trust?
The answer to this question, quite simply, is no. Medicare does not seize or attach anything. Setting up a living trust can sometimes offer certain protections against a loss of assets, but it can also remove you from eligibility for Medicaid, especially if it’s not arranged properly. You need to be aware of all of the relevant laws and receive the best possible consultation when moving forward.
Generally speaking, you will only be permitted a very minimal amount of funds for personal uses while in a long-term nursing care. The majority of your assets must be used for your actual day-to-day care.
How Can I Protect My Assets?
The best way to protect your assets against the expenditure requirements is with the help of an experienced Montana trusts attorney. At Tanko Law, we have many years of experience setting up wills, trusts and all aspects of estate planning. Give us a call today for more information, and get started protecting your assets and planning your estate.