• Skip to main content
  • Skip to primary sidebar
  • Skip to footer
  • (843) 815-8580
  • hunter@montgomeryestateplanning.com
  • 10 Pinckney Colony Road, Suite #402 Bluffton, SC 29910

Montgomery Law Firm, LLC

Your Trusted Estate Attorney in Bluffton, SC

  • Home
  • Our Firm
    • About Our Firm
    • Attorney Profile
  • Services
    • Asset Protection & Business Planning
    • Elder Law & Medicaid Services
    • Estate & Gift Tax Figures
    • Estate Planning Services
    • Family-Owned Businesses & Farms
    • Financial Planning Assistance
    • Incapacity Planning
    • IRA & Retirement Planning
    • Legacy Planning
    • Pet Planning
    • Special Needs Planning
    • Trust Administration & Probate
  • Elder Law
    • Are You A Caregiver?
    • Coping With Alzheimer’s
    • Emergency Medicaid & Nursing Home Planning
    • Hospice Care
    • Medicaid Planning
  • Resources
    • Blog
    • DocuBank
    • Elder Law Reports
    • Estate Planning Resources
      • Definitions
      • Estate Planning & Related Forms
      • Estate Planning Checkup
      • Estate Planning Reports
      • Incapacity Planning Definitions
      • Is Your Estate Plan Outdated?
      • Top 10 Estate & Legacy Planning Techniques
    • Frequently Asked Questions
      • Estate Planning
      • Incapacity Planning
      • Irrevocable Trust
      • Legacy Wealth Planning
      • Trust Administration & Probate
    • Pre-Consultation Form
    • Special Needs Resources
    • Trust Administration & Probate Resources
      • Bereavement Resources
      • How to Know if You Need Extra Help With Your Grieving
      • Loss of a Loved One
      • The Mourner’s Bill of Rights
      • Things You Need To Do When a Loved One Passes Away With a Trust
      • Things You Need To Do When a Loved One Passes Away With a Will
      • Trust Administration & Probate Definitions
  • Webinars
  • Seminars
  • Reviews
    • Review Us
    • Our Reviews
  • Contact Us
  • Search
Home / Elder Law / A Medicaid Trust Can Keep Assets in the Family

A Medicaid Trust Can Keep Assets in the Family

July 3, 2022 by Hunter Montgomery

medicaid trustWhen you think about the legacy that you will be able to pass along to your loved ones, you can probably envision the expenses that you expect to incur during your retirement years. Obviously, there are some uncertainties, but you may have a pretty good general idea.

This being stated, you may be overlooking an enormous expense that can have a serious impact on the inheritances that you want to leave to your children.

Long-Term Care

Nobody is anxious to think about this subject, and this is understandable to some extent, but ignoring unpleasant realities does not make them go away. Most senior citizens will need help with their activities of daily living eventually, and many will reside in nursing homes.

You can expect to pay over $100,000 for a year in a nursing home in the Hilton Head area, and this is the average length of stay. A married couple could face two different sets of nursing home bills, and people sometimes spend multiple years in these facilities.

Medicare will provide a solid health insurance underpinning when you are a senior, but unfortunately, the program does not pay for the custodial care that nursing homes provide.

Medicaid Eligibility

Medicaid covers custodial care, and in fact, most people in nursing homes are enrolled in the program. You are probably aware of the fact that Medicaid is only available to people with sparse financial resources, so there is a $2000 limit on countable assets.

This can seem like a dealbreaker, but a Medicaid planning strategy can be implemented, and it starts with an understanding of the non-countable assets. Your home is not counted, but there is an equity limit of $636,000 in South Carolina in 2022.

When a healthy spouse will be living independently while their spouse enters a nursing facility, there is no equity limit at all. However, you have to be aware of Medicaid estate recovery.

The program is required to seek reimbursement from the estates of people that were using Medicaid to pay for long-term care. As a result, when a beneficiary is in direct possession of a home at the time of their passing, Medicaid can place a lien on the property.

It should be noted that there would be no lien if a healthy spouse or a sibling with an ownership interest is still residing in the home.

Other non-countable assets include one vehicle, wedding rings, engagement rings, heirloom jewelry, household goods, personal effects, and prepaid burial plots. An applicant can have up to $1500 of whole life insurance, the same amount set aside for final expenses, and unlimited term life.

Medicaid Trust

You could convey countable assets into a Medicaid trust. This would be an irrevocable trust, and you would not be able to act as the trustee or access the principal.

That’s the bad news, but the good news is that you could accept distributions of the earnings that are generated by assets in the trust. If and when you apply for Medicaid, you would no longer be able to receive the income.

It would be very simple if you could create the trust after you find out that you have to move into a nursing home, but there is a rule in place to prevent reactive divestitures. You have to fund the trust at least five years before you apply for Medicaid coverage.

Your eligibility is delayed if you violate this rule. The penalty is tied to the amount of the divestitures compared to the cost of nursing home care in South Carolina. For example, if you give away enough to pay for one year of care, your eligibility would be delayed by a year.

Schedule a Consultation Today!

As you can see, if you act in advance, you can position your assets wisely with future Medicaid eligibility in mind. We can help you devise a nursing home asset protection plan that will give you peace of mind as you live in comfort during your golden years.

You can schedule a consultation at our Bluffton, SC elder law office if you call us at 843-815-8580. There is also a contact form on this site you can use to send us a message, and if you reach out electronically, you will receive a prompt response.

  • Author
  • Recent Posts
Hunter Montgomery
Hunter Montgomery
Hunter Montgomery is the owner/managing attorney of the Montgomery Law Firm, LLC.He has been practicing estate planning law fsince 2002. Hunter is a member of the American Academy of Estate Planning Attorneys.

Hunter is a member of the South Carolina Bar Association, the Beaufort County Bar Association, and has served on charitable and advisory boards in the Bluffton/Hilton Head area.

Hunter graduated from Hilton Head High School. He then earned his Bachelor of Science Degree in Economics from Clemson University, in Clemson, South Carolina.

Hunter graduated Cum Laude from Regent University School of Law in Virginia Beach, Virginia, having earned a Juris Doctor Degree. He also wrote his doctorial thesis on Estate Planning Dynasty Trusts.

Hunter has called Beaufort County home for since 1984, where he lives with his wife and two children.In his spare time he dabbles in automobiles, reading history, hunting and fishing.
Hunter Montgomery
Latest posts by Hunter Montgomery (see all)
  • Sandwich Generation Juggles Responsibilities - February 27, 2023
  • How Can You Minimize Estate Tax Liability? - February 20, 2023
  • Elder Law Attorneys: Who Are They and What Do They Do? - February 15, 2023

About Hunter Montgomery

Hunter Montgomery is the owner/managing attorney of the Montgomery Law Firm, LLC. He has been practicing estate planning law fsince 2002. Hunter is a member of the American Academy of Estate Planning Attorneys.

Hunter is a member of the South Carolina Bar Association, the Beaufort County Bar Association, and has served on charitable and advisory boards in the Bluffton/Hilton Head area.

Hunter graduated from Hilton Head High School. He then earned his Bachelor of Science Degree in Economics from Clemson University, in Clemson, South Carolina.

Hunter graduated Cum Laude from Regent University School of Law in Virginia Beach, Virginia, having earned a Juris Doctor Degree. He also wrote his doctorial thesis on Estate Planning Dynasty Trusts.

Hunter has called Beaufort County home for since 1984, where he lives with his wife and two children. In his spare time he dabbles in automobiles, reading history, hunting and fishing.

Blog Subscription

Sign up for our blog to receive the latest estate planning news and updates.

Map

Map

Business Hours

Monday9:00 AM - 5:00 PM
Tuesday9:00 AM - 5:00 PM
Wednesday9:00 AM - 5:00 PM
Thursday9:00 AM - 5:00 PM
Friday9:00 AM - 5:00 PM
Montgomery Law Firm, LLC

Montgomery Law Firm, LLC. helps you define what's important.

Montgomery Law Firm, LLC

Contact Info

10 Pinckney Colony Road
Suite #402
Bluffton, SC 29910

Toll Free: (843) 815-8580
Mon-Fri: 9:00am – 5:00pm

Quick Links

  • Our Firm
  • Reviews
  • Privacy Policy
  • Disclaimer
  • Irrevocable Trust FAQs

Webinars Sign up

© 2023 American Academy of Estate Planning Attorneys, Inc All rights reserved.