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Estate Planning

Wills & Trusts

Who needs an estate plan? The short answer is: “everyone.” Well, almost everyone. If you have assets (personal property, real property, bank accounts, retirement and/or investment accounts, vehicles, etc.) then you should seriously consider preparing an estate plan so that whatever you own will be passed down to the persons to whom you want.

The two main types of estate plans are Wills and Trusts. Most people have heard these terms but generally have only a vague idea of what they are or how they differ from each other. This is where we come in. Our job is to listen to our clients, assess their needs and educate them as to what type of plan would be the best fit based on their circumstances.

In addition to a Will or Trust, a comprehensive estate plan should include a Power of Attorney (to appoint somebody to handle your assets) and an Advance Directive (to appoint somebody to handle your personal and health care) so that a trusted family member or friend can be in place to manage your affairs during your lifetime, if needed.

Medicaid Planning

A Medicaid Asset Protection Trust is an irrevocable trust used for Medicaid planning and asset protection purposes. Although not always right for everyone, this type of trust may be useful in preserving assets while maintaining Medicaid eligibility. Medicaid is the largest source of payment for long-term care in Oregon. It is a joint Federal and State program that covers a range of long-term care services.

In order to qualify for Medicaid benefits, one of the tests an individual will need to pass is an asset test. For a single applicant in 2024, the asset limit is $2,000, which means the individual must have $2,000 or less in countable assets. Countable assets include bank accounts, retirement accounts, stocks, bonds, and any other assets that can be easily converted to cash. Non-countable assets include personal belongings, such as clothing, household furnishings, an automobile, and generally one’s primary home.

In addition, state Medicaid programs have a 5-year look-back period. The Medicaid department will scrutinize any transfers that you have made during the look-back period. If you have transferred assets for less than fair market value during that time, you may incur a penalty period and will not be able to receive Medicaid benefits right away. The State of Oregon is also required to seek recovery of the amount the state’s Medicaid program spent on an individual. The State of Oregon is allowed to recover against any real or personal property and other assets to the individual had legal title or an interest in at the time of the individual’s death.

These irrevocable trusts can be used in proactive planning, where there is not in immediate need of care. The assets are placed into the trust, wait out the look-back period, and thereafter an individual may qualify for care immediately if needed. These irrevocable trusts are designed in a way that passes Medicaid scrutiny so that these assets are not counted for eligibility purposes. Using these trusts in this manner can give you peace of mind knowing that if you need care down the road, you will not lose your life savings paying for that care.

Blog posts about Estate Planning