Paying for long-term care costs can feel overwhelming. Even if you have money available, the monthly expenses add up. Without assistance from government programs or insurance, money can quickly run out. Auld Brothers Law Group has experienced Elder Law attorneys in Pittsburgh who can help protect your assets from medical care expenses.
We’ll answer the common question, “Can a nursing home take money from a Revocable Trust?” Additionally, this article will provide more information on how you can cover long-term expenses without losing all your money.
Revocable Trust: How it Works
A Revocable Trust allows you to remain in control of your assets. It can be adjusted at any point during your lifetime, including:
- Removing beneficiaries
- Selecting new beneficiaries
- Modifying stipulations on how trustees can use the assets
- Setting specific instructions on how the trustee can distribute money for beneficiaries who are minors
Unfortunately, this type of Trust doesn’t work well if you’re trying to protect your money or assets from other entities (creditors, lawsuits, or applying for long-term care from Medicaid). It doesn’t work because the assets are still in your control, making it “fair game” in the above situations.
Irrevocable Trust: How it Works
An Irrevocable Trust is the opposite of a Revocable Trust. It’s permanent. After you set the agreement, you can no longer make changes.
One main advantage of opting for an Irrevocable Trust is that once you select a trustee and sign the agreement, the assets are no longer in your control. By releasing control of your chosen assets, they are no longer part of your estate. This situation is beneficial if you’re:
- Applying for government assistance that requests you include all your assets
- Looking to lower your estate taxes after your death
- Avoiding losing assets due to a potential lawsuit
Common Question: Can a Nursing Home Take Money from a Revocable Trust?
After understanding the difference between the two Trusts, the answer to the question “Can a nursing home take money from a Revocable Trust?” is yes. Since the money and assets are in a Revocable Trust, they remain in your control. Therefore, if the nursing home fought for payment, they can go after your assets.
Several Options are Available Help Cover Long-Term Care Expenses
The good news, you can still protect your hard-earned money and assets. There are several options available. Meet with an attorney to find the best one for your situation.
Establish an Annuity
An annuity is a long-term investment contract you have with an insurance company. The purpose is to protect your money so you don’t outlive the money in your bank account. Essentially you invest your money then your money is returned to you as income with regular payments.
There are several types of annuities available. You will want to work with an experienced lawyer to set one up due to its complex process.
Long-Term Care Insurance
Long-term insurance, unlike traditional insurance, will reimburse you a daily amount of money to help cover the cost for services that help with your daily activities. It’s important to note that this option works well if you currently don’t need care. However, if you currently need long-term care, you might not be eligible for this insurance. If you do qualify, they might provide you with limited coverage or a higher rate to pay.
Make sure to consult with your attorney regarding your options to make sure you select a plan that will help you and not cost additional money.
Medicaid Assistance
Pennsylvania’s Medicaid program offers health care coverage for adults and children who need help with care costs. One disadvantage of this assistance is that it’s only available to low-income people. When you apply for aid, you’ll have to include all your money and assets.
If you’re planning ahead and have over five years before you would need assistance, then you can discuss the option of using an Irrevocable Trust to lower your overall assets to help with your eligibility.
Veterans’ Administration “Aid and Attendance”
If you’re a veteran, you may qualify for their “Aid and Attendance” monthly payment options. A person might be eligible if they currently receive a VA pension and meet one of the following criteria:
- Need help with daily activities
- Bedridden due to an illness
- Loss of mental or physical abilities due to a disability
- Limited eyesight
Your lawyer can help you determine if you or a loved one is eligible for this type of assistance.
Other Options
There are still several other options that might help you. Consult with a knowledgeable Elder Law attorney about your circumstance. They can review the options that might work best for you.
Seek Help of an Experienced Elder Law Attorney
Rebecca A. Auld is an experienced Elder Law attorney. She is passionate about helping individuals and families make knowledgeable and informed choices for their future. Request a free 30-minute consultation to learn how Rebecca can help you and your family with long-term medical costs.