How does the Medicaid Asset Protection Trust Work?
The NY Medicaid asset protection trust is obviously a valuable tool in Estate, and Elder law planning and in avoiding NY probate. When properly drafted and administered, the NY Medicaid asset protection trust can provide a continued source of income to the creator if that is the way they wish to have the trust drafted. It also gives the advantage in the protection of the principal of the trust assets from nursing homes. Sometimes, when drafting the Medicaid asset protection trust, we will draft it as an income only Medicaid trust, which would provide that all of the income is payable to the settler or the creator, the person creating the trust. However, there is no such requirement that all of the income is to be paid to the creator of the trust that is an option for the client and that is something that needs to be discussed during a planning session. That individual makes the decision as to whether they prefer to have the income payable to them, or they may want the income to stay in the trust.
If the settlor, the creator, or the person creating the trust wants the income payable to them during their lifetime, legally that income would be paid to them.
The principal assets would be protected which is the most important reason to have a Medicaid asset protection trust, so that the principal assets are protected from the NY nursing home. The other important reason to have the NY Medicaid asset protection trust is to avoid NY probate of the assets which are placed into the Medicaid asset protection trust. Avoiding probate in NY avoids delays and cost upon death.
The way an individual sets up their Medicaid asset protection trust in NY is a personal choice that an individual would have to make when having a planning meeting with the Law Offices of Michael Camporeale to discuss whether in fact they want their income from the Medicaid asset protection trust to be payable to them, or if they rather have that protected and have that income be payable to the trust.
For more information about Medicaid Asset Protection, a free initial consultation is your next best step. Get the information and legal answers you are seeking by calling (718) 475-9639 today.
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