Medicaid Trust

As your clients start to get older, many of them may be looking for a way to protect themselves financially, pass on assets to loved ones, and maintain their eligibility for Medicaid benefits. In most states, Medicaid puts limits on the countable assets that you can possess. The best option for your client is to establish a Medicaid trust. There are a number of options in this area and Synergy Settlement Services can guide your clients through this process.

What is a Medicaid Trust?

First, when you are talking Medicaid trusts, you are talking about a number of trust types. Generally, trusts are legal entities that are maintained by a trustee who holds the assets of a beneficiary for a specific benefit. Depending on the type of trust and who established it, the funds within the trust may not disqualify you from receiving Medicaid benefits.

Types of Trusts

There are a number of trusts available to your client. The primary factor in determining whether a trust can help or hurt your client’s eligibility status is whether it’s a revocable trust or an irrevocable trust. Revocable trusts may be modified by the person who created the trust. Medicaid considers the assets within these trusts as countable, which will adversely affect your client’s eligibility. Irrevocable trusts cannot be changed once they have been established.

Types of irrevocable trusts include:

Special Needs Trusts for Medicaid

A special needs trust can be established for a physically or mentally disabled loved one, under the age of 65. Advantages include that money from donations or inheritance, a legal settlement, or a divorce settlement can be entered into the trust. The trust funds are not considered property of the beneficiary, which helps maintain his or her Medicaid eligibility.

Income-Only Trusts

In this irrevocable trust, income from assets can be payable to the beneficiary, while the principle cannot. The advantage is that the income can be used for living expenses and the principal is passed on to heirs upon your client’s death. You can also place property in the trust.

Testamentary Trusts

These are trusts administered via a will. The funds in this type of trust do not count against a client’s Medicare eligibility because it’s considered “support” for the beneficiary. These trust funds can pay for expenses not covered by Medicaid, including medical specialist evaluations and additional therapy.

How Synergy Settlements Can Help You

Our job starts when your work with the client ends. We will assess your client’s situation and walk them through viable solutions that help them support loved ones and protect their Medicaid eligibility.

For more information or to schedule a consultation, please submit our contact request form or call (877) 242-0022.

Disclaimer: The information contained in this article is for general educational information only. This information does not constitute legal advice, is not intended to constitute legal advice, nor should it be relied upon as legal advice for your specific factual pattern or situation.

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Levin, Papantonio, Thomas, Mitchell, Echsner & Proctor

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Panter, Panter & Sampedro

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