Trusts might not help long-term care eligibility

Mistakenly so, a great number of people believe that establishing a trust can help them with long-term care eligibility.  The idea – incorrect as it may be – is that you can shelter your money in a trust, and then artificially meet the financial eligibility requirements for Arizona’s Medicaid program that covers long-term care, ALTCS.  In other words, the belief is that because money in a trust technically does not belong to the trustor or trust beneficiary, ALTCS will not count trust funds, and thus grant long-term eligibility to applicants with money in a trust.  Just to be clear – this could not be further from the truth!

Under Medicaid rules, there are only three types of trusts that can assist long-term care eligibility.  First, there are special needs trusts, which are only helpful for individuals with special needs, or who have children with special needs.  Second, there are pooled trusts, which are also only helpful for individuals with special needs, or who have children with special needs.  And third, there are income-only trusts, which are only helpful for individuals who meet the ALTCS resource requirement, but who have too much monthly income to qualify for the program.

Each of these three types of trusts have very specific rules that regulate how they may be established, as well rules that regulate how they may be used once they are established.  If you have a family member with special needs, or if you have too much income to qualify for the ALTCS program, these trusts can be very, very helpful to you.  Otherwise, however, establishing a trust will not help you with long-term care eligibility.  In fact, in some instances, establishing a trust actually hinders long-term care eligibility, so you never want to establish a trust until you have full knowledge of how it will affect your planning. The bottom line with trusts is that there is no hard and fast rule that applies evenly to every ALTCS applicant.

The best way to know whether a trust might facilitate long-term care eligibility is to speak with a qualified elder law attorney.  Please feel free to contact JacksonWhite, by calling (480) 818-6912, or by filling out a consultation form.


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