Estate Planning

A Revocable Trust can be changed at any time, avoids probate in the assets held by the trust, and is the most simple type of trust. However, the benefits of a revocable trust are limited.

An Irrevocable Trust cannot be changed. If assets are transferred to an Irrevocable Trust, so that the assets are no longer available to the Grantor, the assets in the trust will be protected from the nursing home (after 5 years); the assets will avoid probate, the stepped-up basis of the property is available; income tax reporting by you is the same, and the capital gains exclusion may still be available to you as grantor. Although you may not have control over the assets in the trust in the sense that you are not able to access principal, you may receive any income generated by the trust assets, you may borrow against the trust assets, and the assets are protected from creditor claims, assets in an irrevocable trust may not be considered marital property for division in the event of a divorce and assets in an irrevocable trust may not affect qualifying for college financial aid.

Proper advance planning by the use of trusts, spend-down strategies, and the disabled and caretaker child exceptions are available to establish Medicaid eligibility.

The primary purpose of a medicaid qualifying trust is to protect the assets from nursing home care. There is a five-year (5) look-back period that is covered by a Medicaid application. With respect to Medicaid, there are distinct transfers of asset rules. If the transfer of assets was before February 8, 2006, the period of ineligibility begins on the first day of the month in which the property was transferred. For example, if a client transfers property with a fair market value of $50,000.00 to his or her child, he or she will be ineligible for MassHealth, for the subsequent 182 days ($50,000.00 divided by $274.00 = 182.48).

There are look back periods that authorize the MassHealth agency to review an applicant's financial statements and take into account any transfers made during the 60 months prior to the date of application.

Where the transfer was on or after February 8, 2006, there is a different rule. The length of ineligibility is calculated the same as stated above. However, the major difference is that the ineligibility period does not begin until the first day of the month in which the resources were transferred for less than fair market value or the date in which the individual is otherwise eligible for MassHealth payment of long term services, whichever is later. That is why it is very important when someone makes application for Medicaid - equally important is the cut off dates referred to above, with respect to transfer of any assets.

We are very familiar with the medicaid application process and we will review any transfer of assets that you may have made in the past in order to determine if there is a period of ineligibility. We stress asset protection. We will explain to you the community resource allowance. We will also discuss the spend-down of assets and the allowable ways to reduce your assets. We will touch upon the appeals process, in the event of a Medicaid denial.

All transfers for less than fair market value are reviewed by the Long Term Care facility, located in Taunton, Massachusetts, and all Medicaid determinations are issued from that office. Should the initial application be denied, it is often necessary to appeal the decision and re-submit the Medicaid Application. Once we prepare the initial application, should it be denied, we continue through with the process until completed.