Positive And Cons of Irrevocable Medicaid Planning Trust

An irrevocable Medicaid trust is the perpetual contract that is made by the owner or trustor, the one who establishes management and control of his or her assets when alive. The main objective of making an irrevocable Medicaid trust is that enables the trustor for keeping his or her assets for the beneficiaries while still qualifying for the Medicaid insurance coverage for long-term medical care later on.

Characteristics

A document is a contract that comprises of all the provisions and terms, containing of asset management, durations, and amounts of the trust and when these income payments are made. The contract provides a person, the trustee - the authority and delegation to act on behalf of a trust. This one is funded by the money and assets of the trustor. This can be either revocable, which implies that it can be ended or changed by the trustor at any point of time or irrevocable, which means that is irreversible and permanent. Medicaid Planning should be irrevocable as the rules state that any assets in a revocable trust as financial resources, putting at risk the eligibility of trustor for the assistance.

Positive Sides of Irrevocable Medicaid Trusts:

• The use of irrevocable trust helps in avoiding probate as the trust decides who will be going to receive your property. The trustee of the trust will manage your assets and the trust will be kept in place after the grantor passes away and will help in managing the assets for the spouse or the children. Most important, the trust avoids the negative aspects of transfer of assets to the children.

• The trust can protect the non-exempted assets from being depleted for the payment of the nursing home care.

• The Irrevocable Medicaid Planning Trust in Wisconsin can hold any type of the asset. Income is distributed to the Medicaid applicant, his or her spouse or children, but not the principal. If allowed at all, the principal distributions can be made only to the children.

• The trust may be left in place in case the grantor passes away, to withhold outright inheritances of assets to the children.

Negative Sides of Irrevocable Medicaid Trusts:

• The main negative side is that with the intention to be a Medicaid Trust, the trust must be irrevocable. The grantor loses control access and control over the principal. Also, irrevocability relies upon the incompetency.

• In case the applicant is incompetent, then trust cannot be established. The only option is to take the help of Durable Power of Attorney that is previously signed to transfer assets out the applicant’s name.

• The use of irrevocable trust might cause Medicaid to analyse all the transfers very closely.

Medicaid Planning can be different things to different people. However, usually, it involves planning for Medicaid qualification without first going broke. There are multiple legal options, many of which are not intuitive nor widely known. Another goal of many is to legally protect assets from attachment by the government within the confines of federal and state laws.

Are you looking for a Medicaid attorney in Wisconsin? Contact Elder Law center of Wisconsin as they help the people in handling complex matters in simple terms. Contact us today for more details!

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