[WSBAPT] Trusts to Protect Assets from Medicaid

[John Creahan]

Hi Jim,
Just to be clear, I do not do any Medicaid planning, so cannot offer any insight into your clients’ Medicaid options.
Having said that, I view your clients’ situation differently. Your clients’ assets will not be exposed to Medicaid’s spend down provisions unless they choose to use Medicaid.
My question is: why would they want to use Medicaid? I am confident that, given their druthers, your clients would rather spend their golden years in a (pricey) private pay facility than in a lower-cost (to them anyway) Medicaid-eligible facility.
Again, I don’t know what you mean when you say they have “substantial wealth.” Still, if they are like my clients in their early 70s, they have a lot of living to do.
Do they really want to give away their assets, to impoverish themselves, for the next 20 years, just to make sure that they can’t afford a private pay facility?
If they haven’t already talked to a financial planner, I would recommend they do so. A planner could help quantify the risks for them and help them better understand their future financial needs.
Hope this helps,
John

John Creahan
206-621-5848
www.cairn-law.com<http://www.cairn-law.com/>


From: wsbapt-bounces at lists.wsbarppt.com [mailto:wsbapt-bounces at lists.wsbarppt.com] On Behalf Of Jim Doran
Sent: Tuesday, November 17, 2015 11:01 AM
To: WSBA Probate & Trust Listserv <wsbapt at lists.wsbarppt.com>
Subject: Re: [WSBAPT] Trusts to Protect Assets from Medicaid

John:
What they are concerned about is that if one of them does have to go into the longterm care and potentially hospitalization, and their relatively low insurance does not cover all the expenses, they will have to expose their assets to the spend-down provisions or not qualify at all for Medicaid.
Am I missing something here?
Jim

James R. Doran
Attorney at Law
100 E. Pine Street -  Suite 205
Bellingham, WA 98225
(360)393-9506
jim at doranlegal.com<mailto:jim at doranlegal.com>
www.doranlegal.com<http://www.doranlegal.com>

On Tue, Nov 17, 2015 at 10:50 AM, John Creahan <john at cairn-law.com<mailto:john at cairn-law.com>> wrote:
Jim,
Before you start implementing your clients’ plan, I suggest you have a long conversation with them about what they really want. We all have different interpretations about the meaning of “significant assets,” but given your brief description, it seems very unlikely that they would ever need Medicaid.
Even if they succeeded in giving all their assets away, what would they gain? If they needed long-term care, which they might not, the government would provide some financial support that would allow them to live in a very basic facility.
If they compared private pay facilities to their Medicaid counterparts, they might reconsider their choices. If they are worried about spending down all their wealth on long-term care, they might want to look into purchasing long-term care insurance.
Hope this helps,
John

John Creahan
206-621-5848<tel:206-621-5848>
www.cairn-law.com<http://www.cairn-law.com/>


From: wsbapt-bounces at lists.wsbarppt.com<mailto:wsbapt-bounces at lists.wsbarppt.com> [mailto:wsbapt-bounces at lists.wsbarppt.com<mailto:wsbapt-bounces at lists.wsbarppt.com>] On Behalf Of Jim Doran
Sent: Tuesday, November 17, 2015 10:22 AM
To: Real Property Section <wsbapt at lists.wsbarppt.com<mailto:wsbapt at lists.wsbarppt.com>>
Subject: [WSBAPT] Trusts to Protect Assets from Medicaid

Hello Listmates:
I know this is a common question and I also know that there is tension in the law regarding how and even "if" this can be done.  I have a client that is asking the question in a pretty straightforward manner.  I think this issue goes to the lack of progress in our society concerning health care and dying.
H & W, both in their early 70s, want to put their significant assets, two pieces of real estate and probably a third very valuable one that they will receive as an inheritance from mother, into a trust to protect them from the Medicaid asset requirements for eligibility and from the spend-down and recoupment provisions of medicaid.  I would imagine the protection from creditors in general is also part of the concept.
The concept is to put the assets into an irrevocable trust that gives them a life estate in the property they choose to live in.  The trust would direct that the remainder at the death of the second trustor would go to the children in a typical scheme.  H & W would keep some assets, such as investment funds and some cash and regular monthly income, out of the trust to live on.  Those assets would not be protected.
One question for them is, who will be the Trustee?  This is an irrevocable trust so you better choose wisely.
For me, the question is whether this can be done at all and how it can be done.  I am aware of the five year look-back provisions so we want to do this asap.
I do have access to the desk books and other library sources.  If someone can point me in the right direction, give me the right name for this kind of trust, or send me a model, it would be appreciated.
Jim Doran


James R. Doran
Attorney at Law
100 E. Pine Street -  Suite 205
Bellingham, WA 98225
(360)393-9506<tel:%28360%29393-9506>
jim at doranlegal.com<mailto:jim at doranlegal.com>
www.doranlegal.com<http://www.doranlegal.com>

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