Medicaid Irrevocable Trust Formation in Utah | Serving Salt Lake City
There is no question about it: long-term care is incredibly expensive. From in-home services to community living to nursing homes, the cost of long-term healthcare averages thousands of dollars per month. In fact, the monthly cost of a private room in a Utah nursing home is over $8,000. This is a major expense, but costs can be mitigated through Medicaid benefits.
Qualifying for Medicaid benefits can be very difficult, especially if you have assets in your name. For this reason, many individuals employ creative legal strategies to qualify for Medicaid benefits. At John Park Law, we help individuals set up Medicaid irrevocable trusts in order to qualify for Institutionalized Medicaid benefits. If you or a loved one may seek long-term care in the future, it is imperative to take action as soon as possible. Call us at 801-701-3330 to discuss your options with an experienced Salt Lake City estate planning attorney.
What Are Institutionalized Medicaid Benefits?
Broadly speaking, Medicaid covers several areas of healthcare including certain comprehensive inpatient services. While the word “institutional” may conjure a few different meanings, the word refers to very specific benefits under the Social Security Act, namely:
- Immediate care facilities for people with intellectual disabilities
- Nursing facilities
- Preadmission screening and resident review
- Inpatient psychiatric services for people under age 21
- Services for people over the age of 65 in an institution for mental or physical diseases
Most commonly, we use Institutionalized Medicaid benefits to cover nursing homes. Nursing homes are residential facilities that cover the total care of admitted individuals. Many people look to Medicaid benefits to cover the costs of nursing homes because they are incredibly expensive.
To qualify for Medicaid benefits, however, certain income and asset requirements must be met. As such, many individuals are forced to liquidate or spend down their assets to qualify. Unfortunately, doing so can result in the loss of generational wealth and assets. This is where Medicaid irrevocable trusts can become valuable.
What Is a Medicaid Irrevocable Trust?
Utah Medicaid sets forth very specific asset and income requirements that are used to determine eligibility for benefits. Assets can include real estate property, vehicles, checking and savings accounts, cash, and life insurance policies, among others. Exceeding the asset limit of $2,000 means that an individual cannot qualify for Medicaid long-term care benefits.
A Medicaid irrevocable trust is used so that a person who exceeds the asset limit can still qualify for Medicaid benefits. When employed correctly, the use of a Medicaid irrevocable trust can prevent an individual from spending down their assets and investments. As a result, Medicaid irrevocable trusts are highly valuable for asset protection.
The strategy is simple: an individual sets up the Medicaid irrevocable trust and names loved ones, such as children, as the trustees. They then fund the trust with assets, including property or life insurance policies. The effectiveness of this strategy, however, hinges entirely on when the individual establishes the trust. Waiting too late to set up this type of trust can result in ineligibility for Medicaid long-term healthcare benefits.
When Can I Set Up a Medicaid Irrevocable Trust?
As mentioned, it is critical to set up a Medicaid irrevocable trust at the right time. These trusts must be set up at least five years before applying for Medicaid long-term healthcare benefits. As long as contributions are made five years before an individual applies, the Medicaid office cannot penalize the individual for transferring assets into the irrevocable trust. Moreover, the Medicaid office will not be able to count any assets within the Medicaid irrevocable trust when determining Medicaid eligibility.
Establish a Medicaid Irrevocable Trust with John Park Law
The most important takeaway in the conversation of Medicaid long-term healthcare benefits is the need to act well in-advance. You do not have the luxury of waiting until the last moment to begin the process of estate planning for Medicaid benefits. Waiting too long can result in the liquidation of your assets or failure to qualify for benefits and costly nursing home bills.
At John Park Law, we prioritize asset protection and employ a wide range of estate planning strategies to ensure that your wealth is maintained. Do not leave your assets vulnerable to Medicaid spend-down. John Park Law is a leading Salt Lake City law firm located in Cottonwood Heights and our team of qualified estate planning attorneys have years of practice in establishing Medicaid irrevocable trusts; call us at 801-701-3330 to start the process today.