Asset Protection Trusts under Iowa Medicaid

The topic of how to safeguard personal assets while also qualifying for Medicaid assistance can be a daunting and often confusing one. It’s common for senior citizens in Iowa to worry about losing everything they’ve worked for just to meet their care needs. Thankfully, there are legitimate strategies to navigate these issues, and one of them is setting up an Asset Protection Trust.

What is an Asset Protection Trust?

An Asset Protection Trust is a legally binding arrangement where a person (the Trustor) transfers ownership of assets to a Trust, managed by a Trustee. Once moved into the Trust, these assets no longer legally belong to the person, which can be useful in meeting the asset limit criteria for Iowa Medicaid. It’s important to note that the rules around Trusts are complex, so it’s advisable to consult with a knowledgeable elder law attorney to guide you through the process.

Types of Trusts under Iowa Medicaid

Trusts fall into two main categories: Revocable and Irrevocable. A Revocable Trust allows the Trustor to retain control of the assets and can be altered or revoked during their lifetime. However, Iowa Medicaid considers the assets in a Revocable Trust as part of the individual’s estate, meaning it won’t help in terms of Medicaid eligibility. On the other hand, an Irrevocable Trust, once established, cannot be changed or revoked without the consent of the Trustee and the beneficiaries. Assets placed in an Irrevocable Trust are not usually considered part of the person’s estate for Medicaid purposes, offering a potential way to protect assets while remaining eligible for Medicaid.

Iowa Medicaid Look-Back Period

When considering an Asset Protection Trust, it’s crucial to be aware of the Medicaid Look-Back Period. Iowa Medicaid will examine all asset transfers within the last 60 months (five years) before the application. If any assets were transferred for less than fair market value during this period, Medicaid could impose a penalty, delaying the eligibility for benefits. Therefore, early planning is essential.

Creating a Solid Plan with Huizenga Law Firm, P.C.

The thought of needing long-term care can be stressful, but you’re not alone. We at Huizenga Law Firm, P.C., are here to guide you. We develop personalized plans that address both care needs and asset protection. As the regulations are intricate and often challenging to navigate, we recommend starting your planning as early as possible. We are well-versed in the intricacies of elder law and Medicaid planning, and we can help you create an effective strategy for asset protection that meets your unique needs.

For help understanding Medicaid rules and setting up an Asset Protection Trust, contact Huizenga Law Firm, P.C., today at 712-737-3885. Our team in Orange City, IA, is ready to assist and guide you through this complex process.