How Does A Trust Help You Qualify For Medicaid In Indiana?
When you need Medicaid to cover your or a loved one’s nursing home bills in Indiana, you’ll have to qualify for benefits. The process of planning and qualifying for benefits might involve the creation of trusts. Some trusts can protect your assets, while others won’t. Some trusts are acceptable to Medicaid, while others aren’t. Hawkins Elder Law explains more about trusts for Medicaid planning in Indiana and how our Medicaid planning attorneys can help you.
What Is A Trust?
A trust is a legal arrangement where you (the person making the trust) authorize a trustee (the person responsible for the trust) to hold and manage assets for the benefit of one or more beneficiaries. Trusts serve a wide range of benefits, including efficient control and distribution of your assets. Two of the most important trusts to note for Medicaid planning include Medicaid asset protection trusts (MAPTs) and Miller Trusts, explained below.
Medicaid Asset Protection Trusts
The assets in a Medicaid asset protection trust won’t count against you for Medicaid eligibility purposes if the trust is properly established and funded five years before you apply for Medicaid. With Medicaid asset protection trusts, you irrevocably transfer your principal to the trust and are not the beneficiary of the trust’s principal. However, you could receive income from the trust, and placing your assets into this trust could provide greater protection for your beneficiaries versus you giving assets directly to your beneficiaries.
If the trustee has no discretion to invade principal for the settlor, the settlor’s role as a trustee is not a problem. On the other hand, if any trustee has discretion to distribute principal to the settlor, the entire trust corpus is a countable resource even if the trustee refuses to exercise the discretion.
A MAPT is different than a revocable trust. If you have a revocable living trust (a trust that you can terminate for any reason), these are viewed by Medicaid as in your control, so the value of the trust assets will count against you for Medicaid purposes.
Miller Trusts
A Miller Trust is known as a Qualified Income Trust. It allows you to get approved for Medicaid if your income exceeds Medicaid’s income limits. This is because you place the amount of your income that exceeds Medicaid’s income limits into the trust, and Medicaid is listed as a beneficiary of that trust. Medicaid will have the right to the trust assets when you die to offset the costs Medicaid paid for your long term care benefits. Miller Trusts, which are irrevocable, only come into existence when you need Medicaid, not beforehand.
Medicaid Attorney In Indiana
For more information on using a trust with Medicaid, don’t hesitate to contact an elder law lawyer in Indiana. Click here to learn more about Indiana Medicaid planning strategies.
About The Authors
Jeff R. Hawkins and Jennifer J. Hawkins co-author this blog with Thomas E. Hynes, a lawyer admitted to practice in Pennsylvania, New Jersey and Florida who has a background in estate planning and elder law. Jeff and Jennifer are Trust & Estate Specialty Board Certified Indiana Trust & Estate Lawyers. They are also active members of the Indiana State Bar Association and the Indiana Chapter of the National Academy of Elder Law Attorneys (NAELA). Jeff is also a member of the Illinois NAELA Chapter.
Both Hawkins are admitted to practice law in Indiana, and Jeff Hawkins is admitted to practice law in Illinois.
Jeff is a Fellow of the American College of Trust and Estate Counsel and the Indiana Bar Foundation. He is also a member of the Illinois State Bar Association and he served as the 2014-15 President of the Indiana State Bar Association.
More Information
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