Avoiding Medicaid liens on ones home is a crucial part of planning for your future. Making NY states elder Laws work for you requires learning about your rights in regards to protecting your home. Nursing home care is very expensive and if covered by medicaid the government can put liens on ones property. An irrevocable Medicaid Trust is one strategy to avoid these liens which also happens to be a very flexible strategy. Others use a plan which involves the transfer of ownership of a home to someone in their family. The original owner can protect themselves under this ownership transfer with what’s called a “life estate”.
Irrevocable Medicaid Trust
This process requires ones home and assets to go into a trust which is managed by a member or members of your choice. One can choose anyone they confide in to be your trustee except for your spouse. Some of the benefits to this strategy include rent that the property generates, the right to live in your home for as long as you and the spouse are alive and many tax benefits. After death the funds are distributed exactly how one selected for them to be distributed.
Similar to a Medicaid trust, one can be assured of their right to live in the home for as long as they are alive and collect any rent profits. Life Estate’s have shorter penalty periods and are easy to create and implement. This makes a “Life Estate” a more frugal choice in comparison to a Medicaid Trust. However, when you transfer your property under a Life Estate arrangement you lose your right to sell the house without the consent of the other party. You also lose the right to change ownership of the property down the line without the consent of the other party.
For a complete list of the advantages and disadvantages of the Life Estate process versus the Irrevocable Medicaid Trust process read this article about Medicaid Planning laws & the Life Estate deed.
Planning your future in accordance to NY state Elder Law can be very complicated. Medicaid planning and elder lawyers should be consulted before any major decision is made.
This information was contributed by: Law Offices of Roman Aminov 147-17 Union Turnpike Flushing, NY 11367 (347)766-2685. Roman Aminov is an Estate Planning Attorney in the NYC area. Roman runs an Elder Law Firm in Flushing, NY. Roman’s writings on estate planning and elder law topics are published regularly in magazines across the New York Metropolitan Area.