A Medicaid trust NYC qualifies you for Medicaid benefits (where the government has to pay for your medical care, special needs or nursing home bills) and this is one of the reasons lots of adult New Yorkers opt for such a trust. Another reason people create an irrevocable Medicaid trust is that it gives you the power to appoint or change your trustee at anytime, and typically, people choose one or more of their children, sibling or other trusted relative.

When you create a Medicaid trust, you transfer your property into a trust while still maintaining some level of control as to the management of that property. This is because your trustee is bound by the New York trustee law to follow all instructions which you’ve written down, telling him or her what and what not to do. No trustee can take a trust property for themselves unless the owner instructs another trustee to give to that trustee. Note that while you can name as many trustees of your choice, you cannot name yourself or your spouse as a trustee of your own trust. At your death, your trust property goes down to your beneficiaries just the same way as a revocable living trust, without the nuances of probate or estate taxes.

Note that if your income is above the Medicaid threshold limit, you will need to create two trusts in order to qualify for Medicaid. The income only trust is used for the principal and you’re only entitled to the income and not the principal itself, typically managed by your children if you’re elderly. In addition to this, you’d also need to be a part of a pooled income trust when your income is above the threshold limit. Pooled trusts are specifically managed by non-profit organizations. As such, a pooled trust non-profit normally takes about 8.5% from the income that goes into the trust as fees.

The income only trust is formally called a “Medicaid Asset Protection Trust“, and the other kind of trust is called a “Pooled Trust” or Community Spend Down Trust. This are the two trusts which you will have to create if your income exceeds the threshold limit.

Note that IRA, 401(k) and other forms of retirement accounts need not be a part of a Medicaid trust because the Medicaid administration do not consider these as assets. However, income from these accounts will be counted as part of your total income towards the Medicaid income threshold.

One of the upsides to having a Medicaid Trust NYC is it does not only qualify you for Medicaid but brings to you other interesting benefits. This will be better explained to you by an Elder Law Attorney.

• Elements of a valid Medicaid Trust;
• A trust document;
• A grantor, the original owner of the property;
• A settlor, who sets up the trust;
• A trustee;
• Beneficiaries;
• The property that’s transferred to the trust.

Note that while you can have several settlors, trustees and beneficiaries, you’re a grantor when you transfer your own assets to the trust, a settlor when you set up the trust, and also a beneficiary of the income of the trust.