A Medicaid Trust is an irrevocable trust designed to protect your assets from the staggering costs of long-term care, usually nursing home care. You will be pleased to know that while the trust is irrevocable, many bells and whistles can be included in the trust, which give you a great degree of control. In fact, if the trust is drafted correctly, it can even be revoked.
The first step after creating a Medicaid Trust is to transfer your assets to the trust. For instance, many people create the trust to protect their house. If this is the case, the deed to the house must be transferred to the trustee of the trust. That is how you “put your house into the trust”. The trustee, who is usually a child of the trust’s creator(s), is now the owner of the house, precipitating that feeling of losing control. Let’s address that by describing some of the provisions that can be included in your trust that allow you to maintain a good amount of control.
If the asset transferred to the trust is a house, the trust will provide that you have the right to use and occupy the house, pay the upkeep, maintenance, and taxes related to the house and continue to receive your STAR and Veteran’s exemptions. Thus, you cannot be kicked out of your house.
If the trust is for your house and you intend to downsize or relocate, the trustees can sell the house. The trust can provide, however, that the house cannot be sold without your consent.
I mentioned above that a creator’s child is usually the trustee. If your relationship with your child runs sour, the trust can provide that you have the right to remove and replace the trustee.
The trust can also provide that you can change the beneficiaries of the trust among a class of individuals you select, who are usually your children and grandchildren.
Finally, under New York State law, an irrevocable trust can be revoked by the creator of the trust with the consent of all the beneficiaries of the trust. So, if one day you decide the trust was the worst thing you ever did, there is a mechanism to revoke the trust and return the property to you.
If, after reading this blog, you still feel that you are losing control, there might not be anymore that I can do to help you. I hope, however, that if you are vacillating about the trust because of losing control, I have changed your mind and you will contact me.