| As long term health care continues to spiral upwards, it | | | | how much principal will be paid to or for the benefit of |
| is a good idea to have long term care insurance, which | | | | the elder person. |
| will provide something for both nursing home care and | | | | If the elder retained control and could pay out principal |
| at home care. Beyond long term care insurance, which | | | | to or for his or her benefit, the elder may be deemed |
| has its limits, an elder person can plan for long term | | | | to be in control of the assets despite the trust and the |
| care while protecting their assets. They do this by | | | | elder may be denied coverage under Medicaid. This |
| using a particular trust known as a Medicaid Trust. | | | | lack of control by the elder may be a problem for |
| The Medicaid Trust is particular type of trust which | | | | many elders, although their children may like it since |
| allows an elder person to obtain Medicaid assistance | | | | there may be more assets available for them at the |
| to cover the costs of long term care, without using up | | | | death of the elder person. |
| their own personal assets. In this trust, the individual | | | | Another issue is that as more and more baby |
| who creates the trust retains the right to income for | | | | boomers need assistance to pay for the cost of |
| life. For most elders, this right to income is the only way | | | | nursing home care and apply for Medicaid benefits, |
| they can maintain their standard of living. If the trust is | | | | there may be less money to go around. As a result, |
| created at least 60 months before the elder person | | | | the funds in the trust may have to be used for the |
| applies for Medicaid benefits, the existence of the trust | | | | care of the elder person, which may result in less to |
| will not preclude the elder from qualifying for Medicaid | | | | be inherited by the elder's family. In addition, the |
| benefits to pay for the cost of nursing home care. In | | | | Medicaid law may also change to have a longer look |
| addition, the entire principal of the trust may then be | | | | back provision than 60 months, as a result of the |
| protected from the cost of long term care. | | | | financial pressures of more and more baby boomers |
| There are several issues that an elder needs to be | | | | applying for Medicaid. |
| aware of when using this type of trust. First, the elder | | | | All in all, if the elder person plans ahead and is not |
| does not have control of the principal of the trust. | | | | bothered by the lack of control or the uncertainty of |
| While the elder can still control the ultimate beneficiary | | | | the law, the Medicaid trust can have advantages for |
| of the trust when the elder dies, the elder does not | | | | that person. As this is a specialty type of trust, the |
| control the payment of principal out of the trust from | | | | elder person should consider hiring an expert in this |
| the date of the trust's creation. These trusts are set | | | | area to help to draw this trust for them. |
| up with another trustee involved who will determine | | | | |