Q: Can you pay a nursing home from a irrevocable trust?
My husband and I are in our 60's and in good health, but looking towards our next chapter, we don't have many assets, just a home and car, but want to have our ducks in a row in case of disease, or dementia. I don't want our children to be burdened with any long term care in the future. If necessary, would we be able to sell our assets put into a trust and have the nursing home draw down from it until we expire or the assets expire and go on Medicaid?
A: The whole point of an IRREVOCABLE trust is you are giving up access to principal (and sometimes income as well), so no, YOU would not have access to the principal to use to pay nursing home expenses. However, depending on exactly how the trust is designed, you might have indirect access to the principal through the lifetime beneficiaries, but there can be any prearranged agreement to that effect and no obligation on their part to do so. This is a very brief summary of a very complicated situation. You really should consult with an experienced elder law attorney about how and why to use an irrevocable trust to protect your estate from nursing home expenses. If you do this right, the assets are NOT spent on nursing home expenses; instead, the government pays for your care.
A: I strongly recommend you meet with an experienced estate planning attorney. It appears to me that the type of Trust you are describing is a Revocable Living Trust (not Irrevocable). Sometimes people use an Irrevocable Trust to give their assets away so they can qualify for Medicaid right away. However, if you are both in good health you would not meet the health test for Medicaid so giving your assets away is not a good idea.
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