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How an Irrevocable Trust Can Help You Qualify for Medicaid

Dec. 14, 2023

As the average life expectancy increases and there are many new medical treatments introduced that can help prolong our lives, more and more adults find themselves facing the prospect of long-term care at some point. Unfortunately, assisted living and nursing home facilities can be prohibitively expensive, and you might find yourself spending all the savings you’ve worked so hard to accumulate in order to live. One way around this is an irrevocable trust.

How Can You Qualify for Medicaid?

 

Maryland has strict rules for Medicaid qualification. In order to qualify as an individual, you must have less than $2,500 in assets. This is a tremendously small amount for most people! Some assets are not considered eligible, but many things are, including:

  • The cash value of life insurance policies over $2,500

  • Bank accounts

  • Cars purchased within the past seven years beyond a single private vehicle

  • Properties other than the person’s primary residence

  • Stocks and bonds

  • Certificates of deposit

 

Without an irrevocable trust, the state of Maryland will force you to sell off all of those assets until you reach the $2,500 mark, upon which you will qualify for Medicaid coverage. In order to avoid this unfortunate situation, you must plan ahead.

 

How an Irrevocable Trust Can Help

 

One way to avoid needing to get rid of the assets that you worked hard to accumulate in order to qualify for Medicaid is an irrevocable trust. An irrevocable trust can hold a variety of assets, and it changes who owns the assets from you to the trust. As a result, you will be able to place assets over the $2,500 limit into the trust and qualify for Medicaid. Because this requires planning, it’s a good idea to do this well in advance of when you anticipate needing to explore long-term care options.

 

When deciding whether or not Medicaid will cover your care, they take the past five years of your finances and assets into question. If you sell or donate assets in that period of time, it can be counted towards that $2,500 maximum. It is never too early to start estate planning, and working with the right attorney can help to make sure that you are covered when you need the coverage the most.

 

Partner with Atkinson Law. We’ll Take Care of You Like Family

 

At Atkinson Law, we listen to all our clients and protect their interests so they can receive a positive legal outcome.  We’ll work with you and give you the best possible recommendation for your future. To learn more, contact us today by calling (410) 882-9595 or visiting our website.