Legal Question in Wills and Trusts in Utah
Revocable trusts to protect assets
My partner and I set up revocable living trusts about 4 years ago. We were just told by a long term care insurance salesman that revocable trusts would not protect assets from the state in case we looked to medicaid to pay for long term costs (i.e. nursing home), that only an irrevocable trust would do this. The attorney who helped us said that as long as the revocable trust was set up 3 (or 5) years in advance that it would offer protection. Who is correct?
2 Answers from Attorneys
Re: Revocable trusts to protect assets
Your attorney gave incorrect advice. Any irrevocable trust is subject to invasion by the state or other government for an order to pay to them reimbursement for funds expended for your own care. An irrevocable trust is at risk for at least 2-3 years from invasion, but for longer periods is usually safe. Note: I am very adverse to any trust marketed by sales people. They are not attorneys and usually sell one-size-fits- all programs. Some actually practice law without a license (or qualifications). Make sure you speak with an attorney who stays current with estate planning. You may call for a free consultation.
Re: Revocable trusts to protect assets
Medicaid has special rules. If property is transferred to an irrevocable trust, there is a 60 month look-back period. This means that if assets are transferred to an irrevocable trust within 60 months of going on Medicaid, the state can go after the assets transferred into the trust. A transfer to a revocable trust has almost no asset protection, and particularly not from the state.
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