Medicaid and pooled trusts: Funding home care without going broke

Pooled trusts can help applicants qualify for Medicaid benefits to help cover the cost of in-home care.

Home care and nursing facilities are expensive. Funding these forms of care can deplete a person's life savings. New York State's Partnership for Long-Term Care reports that nursing homes are estimated to cost $137,076 per year in New York City and $145,344 annually in Long Island, and the cost for in home care could be even higher. Medicaid offers some assistance, but the rules for qualification can seem harsh. Meeting these qualifications can be difficult unless steps towards Medicaid planning are taken.

Planning for Medicaid is particularly beneficial when it comes to meeting income qualifications. In some cases, a pooled income trust can help an individual qualify for these benefits without having to give up all their assets.

Qualifying for Medicaid in New York

Medicaid is a government program that can offer financial assistance to help pay for medical bills like those associated with home care or the use of nursing facilities. In order to qualify, individuals must meet certain financial criteria. These criteria can vary depending on the state of residence.

According to New York State's Department of Health, an individual applicant must make less than $1,343 per month and retain assets valuing no more than $14,550. It is important to note that a home, vehicle and some forms of personal property are exempt from the resource limitation.

The basics of a pooled income trust

Potential applicants who make over $1,343 of gross monthly income may consider using a pooled income trust. All of the gross monthly income above the $1,343 limit is considered to be "excess" income and is used to calculate a "spend down" - the amount of money that must be contributed for care with Medicaid paying the costs of care above this "spend down" amount. To avoid this and instead use the "spend down" money to pay for rent, utility bills, etc., a pooled income trust is used. This legal tool allows individuals to put the spend down amount into a trust.

In order to be approved for the use of a pooled income trust, either the applicant must be (a) on Social Security Disability already or (b) determined by Medicaid to be disabled.

Each individual has his or her own sub-account, used to make the payments for the necessary expenses of living. Generally, the funds placed in the account are retained by the trust in the event of the beneficiary's death.

Importance of legal counsel when planning for Medicaid

The use of a pooled trust is just one step towards planning for Medicaid. Those who are attempting to preserve the assets they have worked hard to obtain are wise to seek the counsel of an experienced New York Medicaid planning/asset protection attorney. Our firm will review your situation and discuss the various options that are available, helping to better increase your odds of a stable financial future without depleting all of your assets.

Keywords: estate planning pooled trusts