MEDICAID TRUSTS-WHAT ARE THEY?

medicaid trust capital gains tax

A Medicaid Trust Protects Assets if you Have to Enter a Long Term Facility for an Extended Period of Time

medicaid trust capital gains taxThere are a number of different trusts available to address different situations. Trusts can be testamentary trusts created out of a will or separate stand-alone trusts known as intervivos trusts or commonly called revocable living trusts. Some trusts are created to avoid the probate process. Others are created to provide estate tax savings. Still others are created to avoid special need beneficiaries from losing need based assistance benefits such as Medicaid or SSI. Another type of trust is commonly known as a Medicaid Trust to protect assets in case the maker has to permanently enter a long term care facility in the future. A short overview of such a trust follows.

AN OVERVIEW OF MEDICAID TRUSTS:

Medicaid is a federal need based program to provide financial long term care benefits to those who have exhausted all of their assets. Medicaid also currently has a “look back period” of five (5) years, which basically means that if you give anything away less than five years before you apply for Medicaid, your application will be denied and a period of ineligibility will … Read More... “MEDICAID TRUSTS-WHAT ARE THEY?”

Estate Planning in Ohio ALERT: Is My Trust Still Appropriate?

Estate Planning And The Revocable Living Trust

estate planning revocable living trustA perfect example of the benefits of reviewing your estate planning documents on, at least, an occasional level, can be seen with the marital revocable living trust, also sometimes known as an “A-B” trust.  Should you have such a document, and if it was prepared long ago and never updated, it is probably set up to accomplish exactly the OPPOSITE of what you want it to do.

There are many types of trusts.  There are many reasons to set up a trust.  With a married couple, the most common type of trust is a marital revocable living trust.  Historically, the main purpose of this type of trust was to avoid the probate process at death and to maximize estate tax savings.  Prior to the year 2000, all assets passing to a surviving spouse were exempt from estate taxes.  However, for assets not passing to a surviving spouse, the maximum estate tax exemption for Ohio estate taxes was $25,000 and the maximum estate tax exemption for federal taxes was $600,000.  It was not uncommon for those with a large estate to set up a marital revocable living trust to, in effect, double … Read More... “Estate Planning in Ohio ALERT: Is My Trust Still Appropriate?”

Special Needs Trusts in Ohio in a Nutshell

special needs trusts medicaid ohioShould an individual with special needs receive a large sum of money, it is often wise to have the individual or his/her fiduciary establish a special needs trust in order to not jeopardize assistance already being received such as Medicaid or SSI.  Should a parent or grandparent wish to provide funds to a special needs individual and not jeopardize assistance being received, a special needs trust may also be a good idea.  However, before embarking on such an endeavor, it is critical to understand the different types of special needs trusts and their requirements or else risk losing the benefits already being received.

Set Up Special Needs Trusts To Protect Existing SSI Or Medicaid Benefits

The most common special needs trust created by and with assets of a third party is known as a discretionary “supplemental needs” trust.  With such a trust, there is no requirement that funds be turned over to the state upon the death of the beneficiary.  However, proper drafting is critical.  It is to be used for things not covered by Medicaid or SSI.  It must clearly state that it cannot be used for medical care, comfort, maintenance, health, welfare or general well-being.  It should … Read More... “Special Needs Trusts in Ohio in a Nutshell”