Because of the fact that Medicare does not pay for long-term care many senior citizens wind up relying on Medicaid to pay for nursing home expenses.
Medicaid planning can involve “spending down” so that you can stay within the upper financial asset limit of $2000. It should be noted that some of your personal property does not count toward this $2000 limit, including your primary place of residence.
Divesting yourself of personal ownership of your assets is what spending down is all about. This leads some people to the belief that financial assets that they have conveyed into a revocable living trust will not be counted when the Medicaid program is determining their eligibility.
In fact, assets that you have utilized to fund a revocable living trust will in fact be counted when Medicaid is tallying up your resources.
One of the appeals of a revocable living trust is the fact that you do indeed have control of the funds while you are still alive. You may act as both the beneficiary and the trustee and you have absolute reign over these assets. In fact, you can change the terms of the trust or even dissolve it entirely if this is your choice.
Because of the fact that you do retain incidents of ownership the assets that are in the trust are considered to be yours by Medicaid.
In spite of this there are ways to spend down effectively as long as you plan ahead well in advance with full knowledge of Medicaid program rules and regulations. The best way to proceed would be to discuss all the details with a licensed Chattanooga elder law attorney.