If you don’t have your finances and resources in check ahead of time, you could see them dwindle away quickly. Considering that no one knows when they might end up suddenly requiring long-term care, the best time to start preparing is not today or tomorrow but now, at this very moment.

In case you have been wondering lately that how you can protect your assets should such a situation occurs, you are at the right place. In this article, we aim to deduce various ways you can adopt to protecting your assets if and when faced with nursing home expenses.

Moreover, you must pay attention to fulfilling the requirements to be eligible for Medicaid . This is because Medicaid is the probably the last resort as your income determines whether you are eligible. By the time your income would be such that you qualify for it, you might have already end up with depleted resources.

Don’t worry as there are still some ways you may protect your assets when faced nursing home costs. Let’s explore them together.

Gift the money

You can transfer your assets to others as some of them are exempt. This means that you are free to transfer them as gifts for no or little compensation. They will incur no penalty. Such assets include household goods, certain prepaid funeral expenses, and income-producing property. Additionally, it might even include your home and retirement accounts in some cases.

It is pertinent to mention that it may involve gift taxes as ramification.

Irrevocable trust

To qualify for Medicaid, an irrevocable trust is what you might need as it gives you the ultimate freedom to avoid giving away the assets.

If you place your assets in an irrevocable trust, they would not be any longer yours and will require you to nominate an independent trustee

Speaking of this, while you don’t have the freedom to exercise controlover the trust’s principal amount, you may have the liberty to use the assets present in the trust during your lifetime.

To put things in perspective, an irrevocable trust stands exempted from nursing home costs compared to a living trust. You indeed can’t receive principal from this trust, but the periodic interest and dividends that irrevocable trust offers and receive are safe from seizure.

Additionally, the term “Medicaid trust” may have to be used to describe this type of irrevocable trust if the purpose was to establish it to protect assets when faced with nursing home expenses or long-term carecosts.

Get an attorney to draft a life estateThis will name you as the life tenant and someone you trust as the remainder-man. This person will have

the right to future ownership in the property.
As far as being a life tenant is concerned, you will enjoy the right to continue living in the house until

your death.
Once you have created a life estate, you shall face no penalty when facing nursing home expenses,

provided that the transfer must have occurred at least five years before the time of your illness.

Look-back Period

There is always an asset limit when one applies for a long-term care Medicaid . Therefore, it is important that one’s assets should not exceed that limit to be eligible. A look-back period here prevents Medicaid candidates from selling their assets in order to meet the asset limit to secure Medicaid.







Any opinions are those of the author and not necessarily those of Raymond James.  The information has been obtained from sources considered to be reliable, but Raymond James does not guarantee that the foregoing material is accurate or complete. Raymond James and its advisors do not offer tax or legal advice. You should discuss any ta or legal matters with the appropriate professional.