You have worked hard to build a comfortable life and accumulate meaningful assets such as your home, savings, and investments. With healthcare costs rising and the likelihood of long-term care increasing with age, it’s natural to consider how to protect your assets in the event you or a loved one requires nursing home care. There are differences between revocable and irrevocable trusts, and how each can impact asset protection and eligibility for Medicaid benefits.

     A revocable trust, also called a living trust, lets you retain full control over your assets during your lifetime. You can change, update, or revoke the trust at any moment. This flexibility makes it popular for estate planning, avoiding probate, and ensuring ongoing asset management. However, for Medicaid planning, a revocable trust does not shield your assets. Because you still legally own the assets, Medicaid treats them as part of your estate when assessing eligibility for nursing home benefits.

     In contrast, an irrevocable trust involves giving up direct control over the assets you place into the trust. Once created, the terms of the trust typically cannot be changed, and you cannot access the principal. While this may feel like a loss of control, it provides a powerful layer of protection. Assets in an irrevocable trust are generally not counted by Medicaid, provided they were transferred at least five years before applying for benefits. By planning, you can safeguard your homes and savings from the high costs of long-term care, while still maintaining income or use rights in some instances.

However, for some, an irrevocable trust may feel too restrictive. In those situations, long-term care insurance may be a valuable option to explore. These policies can help cover nursing home or in-home care costs while preserving your estate and maintaining complete control of your assets. Although premiums can be significant, especially later in life, early planning can make this a flexible and effective solution.

     When financial stability is paired with concerns over future healthcare costs, establishing the right combination of strategies is essential. We offer personalized consultations to help you explore trusts, insurance, and other planning tools in depth. If nursing home care is a concern, now is the time to plan, before a health crisis arises. Contact us today to schedule a complimentary consultation and begin protecting what you’ve worked a lifetime to build, so that you can…leave a legacy, not a burden.