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Should I protect my home with a Medicaid trust?

On Behalf of | Jun 8, 2024 | Medicaid Planning | 0 comments

People who anticipate needing to receive Medicaid for healthcare expenses in their older age should plan ahead so their income and wealth do not disqualify them from benefits. Creating a Medicaid trust is one way to prepare your assets.

It is natural to wonder if you should place your home in your Medicaid trust. The question of whether to put a residence into a Medicaid trust depends on the nature and purpose of the property.

The functions of a Medicaid trust

A Medicaid trust, also known as a Medicaid asset protection trust, is an irrevocable trust that shields assets from being counted towards Medicaid eligibility. By placing assets into this trust, Medicaid does not count them as part of your estate.

You can transfer various types of property into a trust. Common examples include cash, investments, particular life insurance policies, valuable possessions, and vehicles.

Whether a home belongs in a Medicaid trust

It is possible to put real estate into your Medicaid trust. However, assigning your primary residence to your trust may not be necessary. Typically, your primary home is exempt from Medicaid asset limits as long as you or certain relatives reside there. However, there are exceptions. If your home equity exceeds the current limit established by New York law, you may need to transfer the property to your trust.

Putting other properties in a Medicaid trust

On the other hand, if you own a secondary home or investment property, placing it in a Medicaid trust can be a strategic move. Medicaid generally considers these properties countable assets and could impact your eligibility for coverage. By transferring your ownership to your trust, you effectively remove them from your countable assets.

Deciding whether to put your home or other assets into a Medicaid trust requires careful consideration of your specific circumstances and long-term goals.