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There may be options if you don't have long-term care insurance

People are living longer today than they used to even 50 years ago. According to the Social Security Administration, the average man in Texas turning 65 today may expect to live another 19 years. The average woman can expect to live until age 86.6.

As much as we would all like to think that we will be hale and hearty our whole lives, it makes sense to plan for the possibility that we might require a certain amount of hands-on care in our final years. Such care is expensive now and will only become more so. With solid estate planning, however, it may be possible to marshal the necessary resources. In some cases, it might even be possible to structure things so that a person can become eligible for Medicaid support.

This might surprise some readers. After all, Medicaid is that combined federal and state insurance program that is intended to provide health care coverage to low income individuals. The income ceiling is not high and even strategies that involve giving away assets to others to lower monthly income can work against the Medicaid applicant.

However, Texas law has a provision that allows for the creation of what is called a "qualifying income trust." They are also called Miller Trusts.

These tools may be particularly useful for seniors whose monthly income is too high to make them eligible for Medicaid, but too low to afford the care they require. By setting up a qualified income trust, a person can funnel pension, Social Security and other income into this irrevocable trust. There are specific rules that must be understood and followed. Upon the beneficiary's death, funds remaining are used to reimburse the state for what was paid by Medicaid.

Not everyone will find the Miller Trust to be a good option. If you wonder if it might be right for you or a loved one, contact an experienced estate planning attorney. Our staff is ready to assist.

Source: Texas Health and Human Services Commission, "Appendix XXXVI, Qualified Income Trusts (QITs) and Medicaid for the Elderly and People with Disabilities (MEPD) Information," accessed July 7, 2016

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