Medicaid Asset Protection in Iowa
Both the Medicaid and VA spend-downs are premised on forcing the individual or couple to spend-down assets in order to qualify, thus putting the primary burden on your assets first. Both programs have a look-back period where assets transferred within that period are subject to penalty. The look-back period for Medicaid in Iowa and Minnesota is 60 months and the look-back period for the VA Aid & Attendance program is 36 months.
The solution oftentimes is to transfer assets and wait out the program’s look-back period – this is known as the GIFT AND WAIT strategy. You turn the look-back period into a waiting period. But most people do not want to transfer the vast majority of their net worth to another person because it would expose those assets to the creditors and soon-to-be ex-spouses of the people receiving the assets.
Transferring assets to a secure trust is usually the preferred method of Medicaid asset protection. Transfers to the Asset Protection Trust are treated like other transfers. Once the assets are inside the trust, a trustee manages the assets for later use or distribution. The assets are no longer considered available for the spend-down and are considered protected.
After the requisite waiting period has passed the transfer of the assets into the trust is no longer included in a transfer penalty. Assets in an Asset Protection Trust are also considered protected from estate recovery.
A thorough Medicaid analysis in Iowa is the key to helping local clients determine if an Asset Protection Trust will help them achieve their asset protection goals. Our firm has helped set up thousands of trusts for families across Iowa and Minnesota to protect assets from the spend-down. To find the Asset Protection Trust that will help you protect your assets, give us a call!