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One way to protect and preserve assets is with an irrevocable, “income-only” trust. Assets, including those that may already be in a revocable trust, can be transferred into an income-only trust that is specifically designed to protect a family’s assets from the devastating effect of long term care. Transfers into such a trust may be subject to a Medicaid penalty depending on whether they occurred within a 60-month lookback period. But even though a penalty might be assessed, you may still come out ahead overall. That’s where the attorneys at Farah, Roberts & Ganor, Ltd. can help. We will guide you through the process and help you determine what types of planning strategies will be most effective for your specific situation.
An irrevocable trust that successfully protects your assets must be carefully drafted. Again, the idea is that the assets placed into the trust will not be “countable resources” for Medicaid eligibility requirements. The reason they are not considered “countable resources” is because the grantor (the person making the trust) does not have access to the trust principal. What the grantor loses in control can be offset by the peace of mind knowing that he or she will not lose their life savings to a nursing home or the government. In addition, this type of trust can also provide support for a loved one with a disability or special needs both during your lifetime and after you have passed.