Whether the creation of a trust (outside the 60-month waiting period, which you're aware of) protects the assets and income of that trust from consideration by Medicaid depends on several factors. These factors all revolve around whether any of the assets or income could, at any time in the future, once again directly benefit the creators of the trust -- in this case, your parents. If so, these assets and income are generally considered by Medicaid to be "available resources" and would count against your parents' Medicaid eligibility limits.
The first such factor is whether the trust is revocable. If your parents can revoke the trust they have created, Medicaid would consider all of the trust assets and income as "available" to your parents.
Similarly, you indicate that your parents remain beneficiaries of the trust. To the extent that the beneficiaries designation means that they can receive income from the trust, that income would be considered as available to your parents for purposes of Medicaid eligibility. If the beneficiary designation means that they would receive proceeds from the sale of a trust asset, Medicaid might consider those assets as available to your parents. The details of the beneficiary designation are crucial to Medicaid's consideration of these trust assets and income. You can review some of these Medicaid trust rules by going to the Treatment of Trusts page
on the Centers for Medicare & Medicaid Services (CMS) Web site. Medicaid's treatment of trusts is established in Section 1917(d) of the Social Security Act, which can be found in the United States Code [the legal reference is 42 U.S.C. §1396p(d)].
To determine the Medicaid consequences of the exact terms of this trust, you need to have an attorney familiar with Medicaid rules examine the trust documents. This is not necessarily the same attorney who drew up the trust papers. If that original attorney is not an experienced with the relationship between trusts and Medicaid eligibility, you'll need to consult with a different attorney who does have such experience.