Will a revocable living trust protect your assets from a nursing home

Attorney Tom Olsen: Robert, I'll tell you another misconception a lot of people are under and that is that they think, "Well, if I have a trust, then I can protect my wealth from nursing homes and qualify for Medicaid." That's just not true.

Attorney Robert Hidock: It's not true at all. Even lawyers make that mistake a lot. I had a client meeting this week where dad had passed away, one daughter was getting a third another daughter was getting a third, and mom was getting a third. The attorney advised them that she could create a trust for mom and give mom like $1,500 a month to live off of and that would be fine and it wouldn't hurt her for Medicaid at all and would protect everything. The fact is that's not true at all.

If an asset is countable outside of a trust, it's countable inside of a trust particularly with the most common trust, a revocable living trust. The only trust that works is that one that people would never want to do. Where if the person that's the applicant creates the trust where they're the grantor they cannot be the trustee. They cannot be the beneficiary and the trustee cannot give them the option of even giving the grantor, which is often their parents, a penny.

Once you do that, you put that away all that money and then you still have to wait that five-year look back period. If something happens in that time, the money's coming back. You didn't protect anything.

Tom: Folks, when you hear about people using trusts out there they're all talking about the same thing. It is a revocable living trust. It is a tool to avoid probate. It is not a tool to protect your wealth from nursing homes. Any creditors, doctors, hospitals, automobile accidents, nursing homes, if they can get your wealth without a trust, they can get your wealth with a living trust. That trust is really all about avoiding probate. That's a something else we'd love to help people do here at the Olsen Law Group is help them avoid probate.

The other side that's complimentary to it is helping people to protect their life savings from nursing homes. I was doing the will and estate planning document for somebody last week and said, "Tom, if we want to protect our life savings from nursing homes, everything that you do to help us avoid probate, is that all like down the drain? Will that not be used?" I said, "No, they're complimentary. They work with each other."

Robert: They do. They go hand in hand. When we do a lady bird deed for somebody, obviously it's to avoid probate and avoid third party creditors. In the Medicaid world, by doing that you are avoiding any kind of recovery from the state of Florida. Again, complimentary.

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