Need Medicaid Planning Help? Is a Special Needs Trust Right for You?

Seek Support from Our Maryland and Washington DC Estate Planning Lawyer

When doing medicaid planning, consider special needs trustsNursing homes and long-term care can wipe out a lifetime of savings in just a few years. Many individuals in need of these services simply pay for nursing homes until their savings run dry and hope that Medicaid is able help them in the future. States typically require older individuals to exhaust nearly all their assets before they become eligible for Medicaid. If you feel you may need the services of a long-term care facility or other medical services but worry about your family’s well-being, estate planning lawyer Michelle Lanchester can work with you to establish a Medicaid plan. She helps families throughout Washington DC and Maryland.

Using Annuities to Become Eligible for Medicaid

Annuities convert a lump sum or asset into payments dispersed over time. If an individual grants a spouse the annuity, the money will not likely affect the individual’s Medicaid eligibility. The individual’s spouse must receive the annuity payments before the end of the spouse’s life expectancy.

For the spouse to receive the annuities without penalties for the Medicaid applicant, the annuity must meet a number of conditions, including the following:

  • The annuity was purchased from a commercial insurance company
  • The annuity is immediate and cannot be cancelled or transferred
  • The annuity must pay the beneficiary in equal monthly payments
  • Payments must be completed before the end of life expectancy of the spouse
  • The Medicaid agency for the state in which the applicant resides is the primary beneficiary of the annuity if the community spouse passes away, which grants the Medicaid agency any remaining funds if the spouse passes away before the life expectancy period

Trusts to Gain Medicaid Eligibility

While revocable trusts disqualify an individual from Medicaid eligibility and Medicaid penalizes applicants for transfers of property, certain irrevocable trusts, known as special purpose trusts, will not disqualify or result in a penalty to the Medicaid applicant. Federal law allows Medicaid beneficiaries to use these trusts to hold and transfer assets, but only according to the rules established by statute. Medicaid applicants can use both a first-party special needs trust for individuals under age 65 and a pooled trust, which can benefit applicants of any age and are managed by non-profit organizations.

Learn More About Medicaid Planning

The examples mentioned previously are only a sample of the available options for Medicaid planning and general long-term care. Numerous solutions exist depending on the specifics of each situation, and some individuals even prefer alternatives to Medicaid such as long term care insurance.

Michelle Lanchester works with many individuals throughout Maryland and Washington DC to find the solutions to their long-term care needs and in setting up special needs trusts. She provides the personal attention your situation requires and works diligently to explore all the options so you can have affordable long-term care. Contact our firm today to start preparing for your future.

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