What is a Trust?
A trust is simply a fiduciary relationship in which one person, called the trustee, holds property to protect or use the property for the benefit of another, called the beneficiary.
Irrevocable or Revocable Trust?
If your goal is to protect your assets from medicaid then an Irrevocable Trust is what you need. This is because medicaid considers any assets that you can withdraw from a trust as assets for medicaid and medicaid will require you to use those assets towards the cost of your care. An Irrevocable Trust can, however, protect your assets in the event you enter a nursing home.
However, if your goal is only to avoid probate, a Revocable Trust may suit your needs and as its name states, a Revocable Trust can be revoked by the creator.
How long is the medicaid look back period?
Medicaid will look back 5 years to see what assets you transferred during the previous 5 years, including the transfer of assets to a trust. Therefore, it is important to plan sooner rather than later.
What other benefits can a trust provide?
A trust can avoid the probate process and fees associated with Surrogate's Court and streamline the transfer of your assets. It can also protect your assets and avoid the pitfalls of placing assets directly into a child's name. A trust can also provide for management of your assets should you become incapacitated.
What is a Supplemental Needs Trust?
This type of Trust is created for the purpose of providing for a person with a disability. It supplements any benefit from a government a qualified person is receiving from.