This is a very complex and diverse process that needs to be personalized for each individual. Depending on the types of assets held by an individual, their long-term goals, and whether they are concerned about protecting their assets from Medicaid spend down requirements, it’s important to consult a knowledgeable attorney to help them navigate the Medicaid planning process, and take it into account with regards to their estate planning. Medicaid currently has a 5-year look back in calculating the assets held by an individual applying for Medicaid funding, which needs to be considered when doing planning of this sort.
The use of different types of trusts, such as an irrevocable trust, to protect real estate or cash assets are common in Medicaid planning. However, different types of trusts come with various types of tax liability. Other examples of options for the protection of real estate holdings might include the formation of a family partnership, or use of life estates. Regardless, the guidance of an attorney will help ensure individuals make informed decisions as to which options make sense and are right for their circumstances, when it comes to their Medicaid planning to make certain those plans are not unraveled in the future by improper planning techniques.