A trust is an estate planning tool that allows people to transfer assets out of an individual's name, thereby protecting and shielding the assets. Trusts can be especially useful in times of crisis. For example, assets can be placed in trusts to keep them out of Medicaid's reach when a person is in need of home care or nursing home care.
A sudden accident or illness can completely devastate a family, emotionally and financially. However, getting an effective estate plan in place immediately after a crisis can help protect the needs of the loved one in crisis as well as the entire family.
Elder law clients many times have issues maintaining the SSI eligibility after an inheritance or personal injury settlement.
At the present time, Special Needs Trusts (SNT) may be established by a parent, grandparent, Court or Guardian for a person with special needs under the age of 65 using that person's funds. This allows a persons whose assets exceed the Medicaid limits to have a SNT established for them and have the "excess" assets transferred into this SNT to continue to receive Medicaid benefits. The trust funds may be used to provide for many services and items uncovered by Medicaid. After the death of the individual, any remaining funds must be used first to repay Medicaid for benefits previously provided.