Are you looking for a Medicaid Asset Protection Trust to protect against Michigan nursing home spenddown? Then chances are you are going to want a Castle Trust, which is a medicaid asset protection trust that can help preserve assets so they don’t have to be spent down to qualify for nursing home medicaid in Michigan.
Not every attorney is familiar with setting up trusts like this to protect against the devastating cost of long-term care in a nursing home. It is important to meet with a Michigan elder care attorney who is a Certified Elder Law Attorney (CELA), not just an attorney that says they do estate planning or elder law. Currently, there are 19 CELAs in the state of Michigan and 400 accross the nation.
Michigan Medicaid Rules
In Michigan, you are allowed to have $2,000 in assets, any more than that for a single individual and you will not be able to qualify for Medicaid, which can help pay nursing home costs in Michigan. A nursing home in south-east Michigan (Oakland County, Livingston County, Wayne County) can cost between $8,000-$12,000 per month. By qualifying for Medicaid, you can have the state pay for a majority of your care in Michigan.
With the Medicaid asset test of $2,000 you cannot just give your money away and hope to qualify for Medicaid because there is a lookback period of 5 years. What that means is the state of Michigan looks back 5 years to see if you have made any gifts and if you have, they are going to penalize you with a divestment penalty. Basically, the state of Michigan will add up all the gifts over the past 5 years and based on that number will not allow you to qualify for Medicaid in Michigan for a period of time based on the amount gifted.
Medicaid Asset Protection Trust | Castle Trust
This is where a Medicaid Asset Protection Trust (Castle Trust) can help your family. By setting up a Medicaid Asset Protection Trust (Castle Trust) five years before needing nursing home care, all the assets in the trust can be protected without having to spenddown to the $2,000 asset limit. The assets in the trust are protected from nurising home and Medicaid spenddown.
Castle Trust Explained
A Castle Trust is form of Medicaid Asset Protection Trust that allows for the changes to be made inside the trust, even if the trust is irrevocable. Many estate planning lawyers and elder law attorneys do irreovable Medicaid Asset Protection Trusts that do not allow for control or changes to be made to their irrevocable trusts. This is a key benefit that seperates the Castle Trust from most of the Medicaid Asset Protection Trusts that elder care lawyers are setting up. The Castle Trust allows more control then a common Medicaid Asset Protection Trust while still protecting against the devastating cost of long-term care in a nursing home.
Steps for Setting Up a Castle Trust
A Castle Trust is not the type of trust you can download off the internet from LegalZoom or even the type of trust you should get from an estate planning lawyer. A Certified Elder Law Attorney (CELA) may know what a Castle Trust is. The CELA designation is the top designation an estate planning lawyer or elder care attorney can get and shows their dedication and knowledge in the areas of estate planning and elder law.
Your first step in creating a Medicaid Asset Protection Trust or Castle Trust is to contact a Certified Elder Law Attorney. Any easy way to do that is to attend one of our upcoming LifeCare Planning workshops where we cover the differences between a revocable living trust and a Castle Trust.