Medicaid is a government-sponsored health insurance program that helps low-income individuals and families cover the cost of medical care. In order to qualify for Medicaid, applicants must meet certain income and asset requirements. For some Maryland residents, this means restructuring their assets in order to qualify. Following are some of the steps involved in asset restructuring for Medicaid qualification.
What are the steps involved?
The first step is to determine which of your assets are countable towards the Medicaid asset limit. Generally speaking, countable assets include cash, investments, property, vehicles and life insurance policies with a cash value greater than $1,500. However, there are some exceptions to this rule. For instance, your primary residence and personal belongings are not counted as countable assets.
Create an irrevocable trust
The next step is to create an irrevocable trust into which you will transfer your countable assets. An irrevocable trust is a type of trust that cannot be modified or undone once it has been created. This is important because it ensures that your assets will be used for their intended purpose – namely, to pay for your long-term care – and not diverted to other uses such as paying off debts.
Transfer your countable assets into the trust
Once you have created your irrevocable trust, you will need to transfer your countable assets into the trust in order to make them exempt from the Medicaid asset limit. You may want an experienced advisor to ensure that this process is done correctly and that all applicable laws and regulations are followed.
Restructuring your assets is one way to qualify for Medicaid if you otherwise exceed the program’s asset limits. Doing so may give you peace of mind as you plan for possible long-term care in the future.