Understanding what use Medicaid trusts have is important in Concord, California. Law can be confusing since every state is different. Medicaid trusts fall under elder law, and it would be wise to find a lawyer that specializes in it. Other areas of law that connect to elder law include probate and estate administration, estate planning, and probate and trust estates litigation.
What is a Medicaid trust?
Irrevocable Medicaid trusts protect assets from liquidation when entering a nursing home. With an irrevocable Medicaid trust, a person doesn’t need to sell investments off and allows wealth to pass to the next generation. There are alternative options to protect your assets, so a Medicaid trust isn’t always the answer.
How does a Medicaid trust works in California?
An irrevocable Medicaid trust works as a gift through the trust. The trust owner usually chooses their children as beneficiaries and trustees. Fund the trust with whichever assets the person chooses. A person can use a Medicaid trust as long as they have made contributions in the last five years. Under California elder law, the Medicaid office won’t penalize the transfer of wealth and other assets don’t affect the eligibility.
Personal priorities and circumstances when uses a Medicaid trust
An irrevocable Medicaid trust is a powerful protection tool, but there are options to consider. The family dynamic is important to think about when passing control to a trustee. The owner and their spouse can’t be a beneficiary of the trust. The trustee can use the trust against the wishes of the owner while they’re still alive. Tax implications can vary. An elder law lawyer would need the personal details of a trust to figure out unique tax implications. The design of a Medicaid trust is so the person will use Medicaid to help pay for eldercare. Giving the wealth to the next generation will give the owner fewer options for nursing home facilities.
The use of Medicaid trusts in California is to keep wealth in the family. In California, Medicaid trusts and property such as a home are exempt from Medicaid’s asset limit. It isn’t a decision to make lightly.