Why funding a trust with your home can protect it as you age

On Behalf of | Feb 7, 2020 | Medicaid Planning And Asset Protection |

Having your name on the title to your home can be a source of intense pride. Many people can think back to the day that they signed the deed that made them the official owner of their property.

The thought of taking your name off of one of your most important assets could seem unnecessary or even risky. However, using a home to fund a trust and having the trust hold the title for your home can benefit you and your heirs or beneficiaries.

Homes held in trust won’t count against you if you need Medicaid

Those who need extensive long-term care as they age may eventually apply for Medicaid to cover the cost of skilled nursing care or residency in a nursing home. The government looks over your financial records for the previous five years when determining if you qualify for Medicaid benefits.

By placing your home in a trust well before you need Medicaid benefits, you help ensure that your family home won’t prevent you from qualifying for Medicaid. Transfers that happen shortly before someone applies for benefits can result in penalties.

The government usually can’t claim property from a trust to repay Medicaid benefits

One thing that surprises many people is the fact that the government can and does attempt to exact repayment for Medicaid benefits from an individual’s estate after they die.

Assets placed in a trust as part of your long-term care planning efforts will typically not wind up subject to seizure to repay Medicaid debts. Placing your home in a trust could help you preserve that property for future generations and ensure a smooth transfer of ownership to the next family members to reside there.