What is a VA Asset Protection Trust?
May 21st, 2018
A VA asset protection trust is specifically designed to protect a veteran’s assets while still maintaining eligibility for benefits that are unique to veterans. This is an irrevocable trust, in that the assets cannot be removed from the trust once they are placed in it. Since the veteran no longer has any ownership interest in the assets placed in the irrevocable trust, they cannot be considered when determining the veteran’s eligibility for government assistance programs such as Medicaid and Veterans Aid & Attendance benefits, which can provide long-term care benefits if needed.
An irrevocable trust may not be for everyone; for instance, it is not advisable unless you have a trusted child, relative, or friend to act as trustee for your assets. That trustee will have complete control over your assets and funds while they are in the trust, and there is not requirement that he or she take assets from the trust and give them to you if needed. As a result, having someone you trust act as trustee is crucial to the smooth operation of the trust and the protection of your assets.
For Medicaid purposes, assets must be moved into an irrevocable trust at least five years prior to applying for Medicaid. However, if nursing home care becomes necessary prior to the five-year lookback period, the trust will have a mechanism to release funds to the beneficiary in a way that still preserves Medicaid eligibility. For a veteran, however, the situation is different. At this time, there is no look-back period for the Veterans Aid & Attendance benefit. This gives a veteran, or his or her surviving spouse, much more flexibility in establishing an irrevocable trust and being able to access veteran’s benefits for long-term care as needed. However, keep in mind that the federal government has proposed a 36-month lookback period for the Veterans Aid & Attendance benefit, although this has not yet gone into effect.
As you can see, trusts can be complex, but there are a number of different types of trusts that may fit your situation. While you may be unsure that a trust will meet your needs, you can turn to Legacy Law Center for legal advice about the different options that are available to you. If you or a loved one needs help with estate planning or related issues, you should definitely contact an experienced Michigan elder law attorney at Legacy Law Center right away. Call Terrence Bertram at Legacy Law Center today and see what we can offer you and your family.