When it comes to Medicaid spend downs and ensuring eligibility, there are several ways to proceed. Knowing which path is best depends upon the situation of the individual applying.
One of the most beneficial spend-down paths is the use of a sole benefit trust. A sole benefit trust is an irrevocable trust that is established by the person applying for Medicaid assistance (or their guardian or their attorney-in-fact) for the benefit of a disabled individual under the age of 65. North Carolina’s Medicaid manual requires that a sole benefit trust satisfy the following elements:
1) The trust must be irrevocable;
2) It can only be for the benefit of qualifying individual (spouse, and that individual must be disabled (as defined by the Social Security Administration) and under the age of 65; and,
3) By its terms, the trust must require that the funds it holds are exhausted within the life expectancy of the beneficiary.
One of the most obvious situations where a sole benefit trust can be helpful is when the individual applying for Medicaid has a disabled family member that they desire to provide for. The funds that would otherwise be exhausted paying for the care of the individual can instead but put towards providing for the disabled family member during their lifetime.
The upshot is that once the funds of the Medicaid applicant are transferred into a qualifying sole benefit trust, the applicant may be immediately eligible for Medicaid assistance (assuming other eligibility factors are met).
If you are seeking advice regarding spend down and Medicaid qualification, contact our office to see if sole benefit trust will work for you.