Do I Need a Living Trust to Protect My Assets from Medicaid?

Posted on: Apr 13, 2017

Do I Need a Living Trust to Protect My Assets from Medicaid?There are strategies to protect assets while still obtaining vital Medicaid Long-Term Care benefits, but a living trust is not one of those strategies.
Revocable Living Trust Definition
A revocable living trust is a written agreement in which an individual, known as the trustor, appoints a trustee and sets forth how the assets of the trust are managed during the trustor’s lifetime and after the trustor’s death. The trustor transfers some or all of his or her assets to the trust, making those assets property of the trust.
In Washington State, a Revocable Living Trust is not a good strategy to protect assets while obtaining Medicaid. A Revocable Living Trust’s assets are considered available to a Medicaid applicant. Everything held in such a trust, including assets such as a home or car that would not otherwise count, are countable assets. Therefore, assets in such a Trust must be spent down in their entirety before Medicaid will pay for the applicant’s care costs.
If you have a Revocable Living Trust, we strongly encourage you to see an Elder Law attorney immediately to discuss whether you need to make changes to your Estate Plan.
Supplemental Needs Trust
If you are married, you cannot protect assets by use of a revocable living trust if your spouse needs Medicaid Long-Term Care. Instead, a Supplemental Needs Trust, created by a Will, can be used so that the assets do not interfere with Medicare Long-Term Care benefits. This type of trust shields those assets from unnecessary depletion.
Unlike assets held in a revocable living trust, assets in a Supplemental Needs Trust are not considered countable by Medicaid and cannot be touched by the state.
Asset Protection Estate Planning
The experienced Washington Elder Law Attorneys of Elder Law Group PLLC can help you protect your assets while still obtaining Medicaid Long-Term Care benefits. We will work hand-in-hand with you to design an Asset Protection Estate PlanTM that is best tailored to meet your objectives and preserve your assets.
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Elder Law Group PLLC has been recognized as one of the fasted growing law firms in the U.S. as an Annual Law Firm 500 Award honoree. Contact us or call (509) 468-0551 (Spokane office), or (509) 579-0206 (Tri-Cities office), for personal, compassionate guidance in Asset Protection Estate Planning and Elder Law.