Q: My brother-in-law told me that his assets are safe from any Medicaid claims that he might encounter in the future for nursing home care because he has a Revocable Trust. I also have a Revocable Trust, but I didn’t think it protected my assets from Medicaid claims. Who is correct? A: You are. A Revocable Trust does NOT protect your assets from a Medicaid recovery claim against you. A Revocable Trust allows the creator/grantor (you) to make any changes to the Trust at any point in their lifetime, as long as they are competent. Because you have so much control over a Revocable Trust and are the beneficiary of the trust during your lifetime, Medicaid law allows for a claim to be made against assets held in a Revocable Trust just as they could make a claim over assets owned in your individual name. If you or your brother-in-law are concerned about protecting your property and/or other assets from future Medicaid claims related to nursing home or hospital expenses, you need to visit with an estate planning attorney well versed in elder law matters. Generally speaking, if you want to protect certain assets from creditor claims, including Medicaid, your assets must be owned by an IRREVOCABLE Trust, which CANNOT be controlled by you in any way. There are Irrevocable Trusts designed specifically for individuals who are concerned about protecting family assets, such as farm and ranch property that has been in the family for generations, and minimizing the risk of losing those assets to pay for long-term nursing home care. Be aware that this type of planning typically involves making a gift and triggering the 5-year look-back for Medicaid eligibility, so time is of the essence. Postponing planning until it appears that long-term nursing home care is inevitable can significantly decrease your ability to protect many of your assets. However, if you are currently in such a situation where you are facing immediate nursing home admission, don’t despair, there may be other options available to you. If you have questions, it is critically important that you seek out an attorney who understands the Medicaid system as it relates to elder care matters in your State. If you have questions about any estate planning or Medicaid planning matter in Kansas, contact Davis & McCann, P.A., Dodge City, Kansas at 620-225-1674. We are members of Wealth Counsel, a national consortium of Estate Planning Attorneys and the National Academy of Elder Law Attorneys (NAELA). We focus our practice on providing clients with the best legal advice on Estate Planning, Medicaid and Long-term Care Planning, Special Needs Planning, Family Business/Small Business Succession Planning, Probate, Trust Administration, Real Estate, 1031 Exchanges, and related matters. Comments are closed.
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