What is the Difference Between Revocable Living Trusts and Others?
Although it’s important to protect your assets, it’s only one aspect of estate planning. Because Medicare will not pay for long term nursing home care, many people feel that they need to deplete their assets in order to qualify for Medicaid coverage. Learn more about creating a trust, which in some cases can help you protect your assets and qualify for Medicaid benefits.
Revocable Living Trusts and Other Types of Trusts
Trusts can name beneficiaries of your estate and also appoint someone to manage your estate when you pass away. A qualified elder law attorney can help you create one of these types of trusts:
- Living Trusts. With a living trust, your assets are put into a trust while you are alive and transferred to your beneficiaries when you die.
- Irrevocable Trusts. An irrevocable trust is a permanent type of trust that can’t be changed after the agreement has been signed.
- Revocable Trusts. A revocable trust is different than an irrevocable trust because it can be changed or cancelled by the grantor. By design, a revocable trust becomes irrevocable after the grantor dies or after some other specific point in time.
Let’s learn more about “revocable living trusts“, the kind that most people choose. The key word in this case is “revocable”. These trusts can be revoked entirely, or partially, at any point in time. Because of this, revocable living trusts do nothing to protect your assets if you or your spouse needs nursing home care or Veteran’s benefits.
The State of Connecticut, or the VA, figures that if a trust is revocable, the assets that are in it still belong to you. Because of this, these assets will count against you when determining if you are eligible for assistance. If you are weighing the pros and cons of a revocable living trust, remember that it will not protect even one penny of your assets if you get sick.
There are benefits to a revocable living trust. This type of trust allows someone else to handle your affairs for you if you are unable. However, in these types of cases, a power of attorney may be just as effective without the complication or cost of the trust.
Creating a trust can be extremely complicated. Because of this, it’s important to have the knowledge and counsel of an experienced attorney in your corner when creating a trust to manage assets while still qualifying for Medicaid.