A revocable living trust will not protect your assets from a nursing home. This is because the assets of a revocable trust are still under the control of the owner. To safeguard your assets from falling expenses before you qualify for Medicaid, you'll need to create an irrevocable trust. An irrevocable trust is a powerful tool that can help you protect your assets from nursing homes and other creditors.
This type of trust is designed to ensure that your assets are not subject to recovery by Medicaid or other creditors. With an irrevocable trust, the grantor, the creator of the trust, does not legally own the trust's assets. This means that the assets are no longer considered part of the grantor's estate and are therefore not subject to recovery by Medicaid or other creditors. An irrevocable trust will help you avoid giving away or spending the value of your assets to qualify for Medicaid. Since the assets you place in the irrevocable trust are technically no longer yours, you'll need to name a primary beneficiary and establish a reliable power of attorney to cover future needs.
The Worth Texas wills and trusts attorney will allow you to properly structure the trust to avoid asset recovery. However, the trust is still subject to the five-year retrospective period. You will not be able to modify, amend, or terminate this type of trust without the use of a trust protector. An irrevocable trust can provide asset protection, since with this type of trust, the grantor, the creator of the trust, does not legally own the trust's assets. An irrevocable trust differs from a revocable trust because no changes can be made after it is created and funded. A Medicaid trust (also known as a Medicaid Asset Protection Trust or MAPT) protects your assets from Medicaid and other creditors in general after you die and helps you meet Medicaid eligibility requirements throughout your life.
Only a properly constituted irrevocable trust can protect your assets; living revocable trusts offer no property protection. This type of trust helps you avoid the probate process and gives you the flexibility to change the terms of the trust. Specifically, the surviving spouse who inherits the irrevocable trust will face the same problems as if they were entitled to government assistance because they are the owner of the trust. Remember that you must create the trust at least five years in advance for it to work properly, and it's vital that you name a beneficiary of your trust. On the other hand, an irrevocable family trust doesn't give you the flexibility to modify the terms of the trust. The main benefit of a revocable trust is that you can name a beneficiary who will receive payments from the trust after your death.
They are the owners of the trust's assets, so eventually, a creditor, such as a nursing home or Medicaid, can request reimbursement by forcing the sale of the trust's assets. Establishing an irrevocable trust can be a complex process, which means that you should work with an attorney who specializes in estate planning who has experience creating these types of trusts. A revocable active trust can help you transfer assets to your beneficiaries and avoid probate legalization, making it a useful part of an estate plan.