Legal Question in Wills and Trusts in Illinois

Re: What kind of trust can save assets from nursing homes?

Other than long term care insurance, there really is no insurance for nursing home care. Ninety-nine percent (99.9%) of health insurance does not cover nursing home care and Medicare only covers long term care in limited circumstances, based on the rehabilitation needs of a patient, and even in those cases coverage continues only for a very limited period of time.

In Illinois, a nursing home resident who applies for Medicaid can only have $2000 in cash and a few other exempt assets. If an applicant has more than that amount, they are placed in a spend-down period until their assets diminish to the required amounts. If an applicant transfers assets as gifts to other people, at anytime in the 36 months prior to filing a Medicaid application, the applicant will be penalized and will not qualify for Medicaid for the period of time that he or she could have paid for nursing home care with the gifts given away. However, if a Medicaid applicant places assets into a Living Trust, the period of examination (aka look-back period) increases to 60 months.

For nursing home residents looking for Medicaid support, trusts are not always the best answer. In fact, due to the 60 month look back period, a Living Trust is definitely the WORST answer. There are other types of trust known as "special needs trusts," however these must be very carefully drafted to qualify. You need to seek the assistance of an attorney who is well-versed in this area of the law.

At DeLaney Law Offices, we are a team of attorneys committed to the practice of Medicaid Planning, Elder Law, and Estate Planning. If you want good sound advice, meticulous drafting, and expertise in this area of the law, please feel free to give me a call: (312) 214-3262.

Amy DeLaney