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End of Life Planning to Provide for the People You Love: Safeguarding Your Assets for Your Family

Creating a Testamentary Special Needs Trust (SNT) is often a good tool to utilize when planning for a spouse or other loved one who may need Medicaid after you are gone.  A Testamentary SNT is a trust created in your will.  Under Federal Law, money in a properly drafted testamentary trust does not count as “resources” of the person applying for Medicaid.  This rule does not apply to revocable trusts.   Assets held in a revocable trust are considered countable resources of the Medicaid applicant.  So, a Testamentary SNT provide a way mechanism for a spouse to leave funds to their surviving spouse or other family member that can be used to pay for services that are not covered by Medicaid without jeopardizing  eligibility for benefits.

For example, suppose Helen needs to go the nursing home.  George dies first leaving an estate worth $250,000.  If George dies intestate (without a Will) or with the typical “I Love You” Will leaving all assets to Helen, Helen will inherit George’s estate.  Since the Medicaid asset limits are $2,000 for an individual, Helen will no longer qualify for Medicaid benefits.  Helen will have to spend down $248,000 on her nursing home costs until she is below the $2,000 countable resource limit.

However, if George had created a Will with a SNT for Helen’s benefit, her Medicaid benefits would be protected and there would be $248,000 available for her additional needs not covered by Medicaid.  These may include extra therapy, special equipment, clothing, hearing aids, eyeglasses, dental expenses, transportation services, evaluation by medical specialists or others, legal fees, visits by family members or companions, bed hold at the nursing home, etc.  When Helen dies, any funds remaining in the SNT will pass by the terms of the George’s Will, to his children or other named beneficiaries.  Medicaid is not entitled to any of the funds held in the SNT.

The information provided above has been a general summary regarding Testamentary Special Needs Trusts for Medicaid planning. As with any planning for Medicaid, there are many pitfalls and traps for the unwary that must be assessed on a case by case basis.

To determine whether a Testamentary Special Needs Trust would be a helpful planning tool for you or a loved one, or if you have other questions about Nursing Home Medicaid, VA Pension benefits, probate, wills, trusts, powers of attorney or health care advance please call Peachtree City Elder Law Attorney Robert Goldberg at 770-229-5729 to schedule your “Discovery Meeting.”

At Goldberg & Associates, we specialize in handling elder law and elder law cases. All of our resources are at your fingertips when you work with Goldberg & Associates. We will do everything in our power to ensure the maximum amount that can be saved, will be saved for your retirement. No stone goes unturned at Goldberg & Associates; we are prepared to make sure you do everything you need to in order to max out those savings options, and make way for the time when you will get to retire.