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Long-term senior care costs a lot of money. No matter how much money adults made during their working years, the cost of long-term care may completely overwhelm resources. Unfortunately, many people occupy that middle ground between too little resources to cover all expenses and too much money to qualify for Medicaid.

You can help your parents improve their chances of qualifying by setting up a Medicaid trust. It operates like any other trust but you establish it for the specific purpose of helping your parents stay below income limits.

Medicaid eligibility

According to MarketWatch, qualifying for Medicaid required a monthly income of $2,205 for individuals, in 2017. This helps ensure that only people who need government assistance receive it. Even so, the government understands that many people may need to shed assets to qualify and makes allowances for this.

Planning ahead

To help your parents shed assets, you may need to plan way ahead. Note that while the government remains flexible on allowing people to shed incomes, even 50 cents more than the appointed threshold for each year may disqualify someone.

Exempted assets

The good news is that not all assets become counted by the government for Medicaid purposes. Some exempted assets include your parents’ primary residence and trusts. Assets counted by the government include stocks, mutual funds, checking accounts, saving accounts and retirement funds.

Transferring non-exempt assets into a trust may cost a few thousand dollars. The more money your parents have to save, the less expensive this looks, compared to simply giving everything away. Also, the sooner you start planning, the more options you may have to better structure income to reduce non-exempt assets.