Getting older can certainly put a dent in a person’s pocketbook, especially if extra care is needed — and it usually is. Aging Arkansas residents should know that living in a nursing home can be incredibly expensive – more than $80,000 a year in many cases. Medicaid usually foots the bill for 60% of that cost, so it tries to recoup the rest by making seniors spend their own assets. In order to qualify for Medicaid in the first place, a person must have $2,205 or less in income a month and $2,000 or less in assets. Proper estate planning may help.
There are certain things that count as assets and certain things that don’t. Some that do include bank accounts, life insurance policies with a cash value of $2,500 or more, property (besides a primary residence and that is not for rent), and stocks and bonds. Those that don’t include 401(k)s or IRAs (payouts from these, however, do count), a primary residence or rental property that is not a primary residence, personal property like jewellery, and home improvements. Medicaid will look back 60 months into a person’s assets to see whether there have been any gifts given to family and friends.
Experts say it is wise to turn countable assets into non-countable assets when it comes to Medicaid. An irrevocable trust may be just the ticket. A grantor can’t make changes or touch the assets in an irrevocable trust and and non-countable as far as Medicaid is concerned. There are pros and cons to using one, but the chief pro is primarily safeguarding assets from Medicaid estate recovery.
An Arkansas attorney experienced in estate planning may be able to offer advice about how irrevocable trusts can aid a client in his or her estate plan. Most people work hard for their money and getting advice on how to safeguard those assets may be a wise move. A lawyer will review a client’s particular life circumstance and may be able to offer a number of ways to do that with a complete estate plan.