Does a living trust protect money from Medicaid consideration?

3 answers | Last updated: Nov 28, 2016
A fellow caregiver asked...

We recently found out that my mom would not have enough money to pay for a nursing home and that she owns a little too much to get Medicaid. In this case, would a living trust protect money from Medicaid?

Expert Answers

When Medicaid decides whether your mother is eligible for Medicaid coverage of nursing home care, it looks to see whether her income and assets are below her state's Medicaid limits. A living trust would not protect any of your mother's assets from consideration by Medicaid because she would still control how the trust funds are spent. Also, a living trust is revocable, which means your mother could end the trust at any time and use the money in it. For these reasons, Medicaid would count the funds in the trust as still belonging to your mother.

Community Answers

Solveig answered...

Your mother can GIFT a certain amount to her children and grandchildren every year. But it must show that the intention was not to avoid paying for her medical needs. (it was late birthday presents).

Sometimes older people have a hard time letting go of their assets, so it has to be stated clearly: you can give it to your family NOW, or the government will take it from you.

Jonny b answered...

An inter vivos revocable trust will not shield an individual from receiving medicaid benefits because the individual controls the assets in the trust. Therefore, you must create a irrevocable special needs trust, or supplemental needs trust. The difference here is that the trust is irrevocable by the grantor and becomes a separate tax entity. Once assets are put into the trust they can never come out. Medicaid will not attribute any funds held in trust to the individual. However, the State must be listed in the trust as the primary beneficiary upon the individuals death in order to be reimbursed for medicaid payments. This trust is sometimes referred to as a Miller Trust or a special needs self settled trust.