A Revocable Living Trust Protect Your Assets

Does A Revocable Living Trust Protect Your Assets From Michigan Medicaid Nursing Home Spend-Down

In a revocable living trust, there are various aspects and conditions related to its continuity and eligibility of assets to be used. One of the important one is medicaid nursing home spend-down. It is the procedure of reducing the countable assets and income to get Medicaid and cover nursing home care. As per the Medicaid rules the assets held in a revocable trust will count as an asset and should be used up on care before Medicaid eligibility begins. If a person has revocable living trust in Michigan that is entitled to assets, then an immediate review and evaluation shall be done to know whether or not the asset will affect Medicaid eligibility.

Many people question whether revocable living trust protects the assets from Michigan Medicaid nursing home spend-down. The fact is a revocable living trust does not protect assets from Michigan Medicaid nursing home spend-down. A person can retain control over the trust which can be changed and cancelled any time. The rules says that those assets to be entirely belong to the person and available to pay for long-term care.

Spend-down process is categorized into two. One is asset spend-down and other is income spend-down.

• Asset Spend-Down: It qualifies for care. In this Medicaid long-term care programs has strict limits on "countable assets”. In case the asset exceeds certain limit, one has to spend it before receiving coverage.
• Income spend- down: if the monthly income exceeds the state medical limit, one can qualify through medical needy.

The Spend-Down Rules

Various assets can be used with a certain designated threshold for Medicaid long-term care in Michigan. In case there is single applicant, the limit is generally $2,000. High limit is there in a non-applicant spouse case.

There are also systematic ways to spend down assets without violating rules. It includes:

• Prepaying funeral expenses: It covers establishing irrevocable funeral trusts or prepaid burial contracts.
• Debt payment: This payment includes paying off mortgages, credit cards, or personal loans.
• Home modifications: For accommodation of healthy needs, the repairs done in the same.
• Purchasing exempt assets: The expenses which are incurred in purchasing a new primary vehicle or upgrading the basic personal property.
• Caregiver agreements: Expenses paid for compensation family members legitimately for providing ongoing care.

The revocable living trust does not protect the assets as the assets become countable and they appear as they are in bank account. One is required to ‘spend down’ for assistance. There is no legal shield in case the assets is used in paying nursing home spend. The other alternative for the same is to choose irrevocable trust. Get your trust drafted with clear clauses and proper structure - visit this website for a revocable living trust.