An irrevocable trust can be used by anyone that is interested in nursing home asset protection. The majority of senior citizens will need some type of paid long-term care eventually, and just over one third will reside in nursing homes.
You can expect to pay $100,000 or more for a year in a nursing facility in the Hilton Head area, so we are talking about some big numbers. The average length of stay is one year, but 13 percent of people that need professional long-term care receive the assistance for more than five years.
Medicare does not pay for the custodial care that nursing homes and in-home health aides provide. Medicaid will cover the cost if you can gain eligibility, but there is a $2000 limit on countable assets.
If you convey resources into an irrevocable, income only trust, the principal would not count if you apply for Medicaid. The “income only” designation is key because you could accept distributions of the trust income while you are living independently.
Advance planning is essential, because there is a five-year look back period. You are ineligible for a period of 60 months after you transfer assets out of your name.
