Irrevocable Medicaid Trusts
The Irrevocable Medicaid Trust is one possible solution available to clients seeking to implement a strategy that seeks to insulate some or all of that person’s assets from having to be committed toward long-term nursing home care costs, while retaining only an income interest in the trust. These asset-protection strategies are more fully discussed in our Elder Law Planning section.
By transferring assets into an Irrevocable Medicaid Trust, the assets in the trust will be protected from having to be used to pay for nursing home care. The challenge for the grantor, i.e., the person who places his or her money/assets into an irrevocable trust, is that he or she must surrender dominion and control over the assets and typically stay out of a nursing home for five years.
- This tool works best for advanced planners who are willing to give up control over whatever is contributed into the trust and retain only an income interest.
- This asset protection tool works well for those who have accumulated substantial wealth and can live comfortably on the income that wealth generates.
- This is a useful tool to protect your home or family cottage.
- Like other solutions available to those examining their options when confronted with possible long-term care costs, this tool can be implemented shortly before or after a person has been admitted to a nursing home (assuming the grantor is competent and/or created a power of attorney that authorizes the establishment of an irrevocable trust), but works best when advance planning is undertaken.