Elder Law Care clients, we have an important update for you.
This applies to Irrevocable Medicaid Asset Protection Trusts and Irrevocable Veterans Asset Protection Trusts.
We’ve been doing recent research on MassHealth Medicaid matters looking to protect our clients and their families in the best way possible.
We are recommending that you do not put any additional dollars into your Irrevocable Trust bank account.
If you opened an Irrevocable Trust bank account for your Irrevocable Medicaid Asset Protection Trust or Veterans Asset Protection Trust, we’re advising you to no longer put any deposits into that Trust bank account.
What happens if I make additional deposits to my Irrevocable Trust bank account?
Our research indicates that a MassHealth Medicaid caseworker could look at a deposit into your irrevocable trust bank account as an additional transfer which could trigger a new 5 year look-back period, at least on that additional deposit.
If you or your loved one became completely incapacitated and you’re looking to get on MassHealth Medicaid benefits and ask that they pay for your $15,000 per month nursing home, Medicaid has the ability to look back 5 years into your finances. If you’ve got that 5 year clock running, we want to keep it running smoothly without any hiccups.
We do not want that second subsequent deposit into your Trust bank account to be considered an additional deposit.
Again, we strongly advise you not to put any additional dollars into your irrevocable trust bank account. Any additional deposits could trigger a new look-back period for you.
What if I don’t have an Irrevocable Trust bank account?
If you did not open an Irrevocable Trust bank account at this time, then you have nothing to worry about and do not take any action. Do not open a Trust bank account.
Can I still use the existing funds in my Irrevocable Trust bank account?
If you have already opened your Trust bank account for your Irrevocable Medicaid Asset Protection Trust, do not worry. Just do not deposit any additional dollars into the account.
If you already have funds in the account to cover carrying costs for your house like your mortgage, your real estate taxes, or your homeowners’ insurance, your Trustee may continue to use that money.
Do not ever have your Trustee give you back money personally from the Irrevocable trust bank account.
Once your account is depleted with a zero balance, do not deposit any additional money into the account. Medicaid could consider that additional deposit as a disqualifying transfer, which would start a new 5 year look-back period.
How can I pay for my housing costs without an Irrevocable Trust bank account?
If you do not have an Irrevocable Trust bank account, or the funds are depleted, you will pay for your home carrying costs, mortgage, real estate taxes, and homeowners insurance from your personal bank accounts.
In summary
- If you have an Irrevocable Medicaid Asset Protection Trust to protect your home from the nursing home and have a Trust bank account under the name of the Trust, do not put any additional deposits in the account.
- If you have an open Trust bank account and you have a balance of funds in the account, have your Trustee use those funds to pay your home carrying costs, mortgage, real estate taxes, and homeowners insurance. Otherwise, use your personal bank account to cover those expenses.
- Do not ever have your Trustee give you back money personally from the Irrevocable trust bank account.
- If you did not open a Trust bank account, do not take any action. Do not open one at this time either.
We feel this is an important change in learning in the industry based on our recent research around MassHealth Medicaid procedure, and the way they’ve been looking at different Medicaid Trusts.
When is the last time your estate plan was reviewed? If you are an active member of the Client Care Alumni Program there is no additional charge for your review. If you are not an active member you can re-enroll in the Client Care Alumni Program by calling (781) 871-7526, or clicking here. We recommend annual reviews because of the 3 L’s; Changes in Law, Life and Learning.
Our goal is to help you protect what you have for the people you love the most. If you have any questions, please call our Elder Law Care Center at (781) 871-7526.
