![]() It is very rigid, so you cannot gain access to the trust funds even if you need them for some other purpose. You should be aware of the drawbacks to such an arrangement. However, if you do move to a nursing home, the trust income will have to go to the nursing home. ![]() This way, the funds in the trust are protected and you can use the income for your living expenses.įor Medicaid purposes, the principal in such trusts is not counted as a resource, provided the trustee cannot pay it to you or your spouse for either of your benefits. At your death the principal is paid to your heirs. In most cases, this type of trust is drafted so that the income is payable to you (the person establishing the trust, called the "grantor") for life, and the principal cannot be applied to benefit you or your spouse. Income-Only Trusts in Planning for MedicaidĪn irrevocable trust is one that cannot be changed after it has been created. Thus, revocable trusts are of no use in Medicaid planning. Medicaid considers the principal of such trusts (that is, the funds that make up the trust) to be assets that are countable in determining Medicaid eligibility. Whether trust assets are counted against Medicaid's resource limits depends on the terms of the trust and who created it.Ī "revocable" trust is one that may be changed or rescinded by the person who created it. A trust is a legal entity under which one person – the "trustee" – holds legal title to property for the benefit of others – the "beneficiaries." The trustee must follow the rules provided in the trust instrument. A safer approach is to put them in an irrevocable trust.
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