Medicaid Trusts

Many ask about using trusts to protect their assets from the expense of long nursing home stays. This can be achieved but takes planning. First, the trust must be irrevocable; second, there is a 5-year “lookback” period, which includes the value of any gifts made during the period still counts as your assets. 

The drawbacks of these Medicaid trusts are that A) you have to actually transfer the assets, and B) you cannot retain the ability to get the assets back if the need or desire arises. The challenges are to draft a trust with sufficient flexibility to adapt to your situation, and to retain enough assets to pay your expenses through the five-year period.