Placing Your House In A Trust Could Be Your Last Chance For Generational Wealth
You have heard it all before about how people who do not consider themselves rich can still benefit from establishing a trust, but certainly those people have more money than you do. In more innocent times, you considered yourself middle class, but all of the trappings of middle-class life are slipping away from you. Yes, you own your house, but you have little or no money saved for retirement. Whatever savings you once had has long since gone to dealing with a string of financial emergencies. You never gathered the funds to buy long-term care insurance when you had the chance, and now you are too old to qualify for it. Things are looking more and more like, if you need to spend more than a few weeks in a nursing home, the only ways to pay for it will be to sell your house and use the proceeds, or else to apply for Medicaid. Can homeowners get Medicaid? If you are poor enough to worry about being able to afford long term care but rich enough that improper navigation of the long-term care question could make you poorer, contact an Orlando estate planning lawyer.
How a Trust Can Protect Medicaid Nursing Home Beneficiaries From Creditor Claims During Probate
Much like filing for bankruptcy, entering a nursing home as a Medicaid beneficiary is an option available to everyone if they are in dire financial straits, but the court will do everything to make sure that people who claim these forms of relief truly are in dire financial straits. For example, if you file for chapter 7 bankruptcy, the bankruptcy court has the right to sell any of your non-exempt assets. Likewise, you can enter a nursing home as a Medicaid beneficiary only if the value of your assets is below a certain eligibility threshold. After you die, Medicaid will even come after your exempt estates, by asking your estate to reimburse it for all the money it spent on your nursing home care, beyond what it was able to recover by redirecting your Social Security check to itself. This means that, if you own your house, Medicaid will ask your estate to sell the house to settle your nursing home bill; if anything is left of the proceeds afterwards, your heirs can inherit it. The best way to ensure that your heirs can inherit your house is to place it in a trust.
Trusts are non-probate assets, which means that, after you die, the property of the trust does not become part of your estate. Instead, it passes to the beneficiaries you listed in the trust instrument. If you are worried that you will need Medicaid nursing home care, you should place your house in a trust. You should do this at least five years before you enter the nursing home, because of the Medicaid five-year lookback rule.
Contact Gierach and Gierach About Estate Planning for Homeowners Who Are Barely Scraping By
An estate planning lawyer can help you revise your estate plan to protect your house from Medicaid asset recovery assets. Contact Gierach and Gierach, P.A. in Orlando, Florida to discuss your case.
Source:
cnb.com/private-banking/insights/transfer-property-into-a-trust.html
