{"id":2722,"date":"2020-08-25T13:49:46","date_gmt":"2020-08-25T20:49:46","guid":{"rendered":"https:\/\/www.jacksonwhitelaw.com\/altcs\/?p=2722"},"modified":"2024-01-08T15:02:40","modified_gmt":"2024-01-08T22:02:40","slug":"irrevocable-trust-protect-assets-from-nursing-home-costs","status":"publish","type":"post","link":"https:\/\/www.jacksonwhitelaw.com\/altcs\/blog\/irrevocable-trust-protect-assets-from-nursing-home-costs\/","title":{"rendered":"Does an Irrevocable Trust Protect Assets from Nursing Home Costs?"},"content":{"rendered":"

Introduction<\/h2>\n

The national average cost of long-term care<\/a> in the U.S. is $225 a day or $6,844 per month for a semi-private room in a nursing home, according to the U.S. Department of Health and Human Services. The high costs charged by nursing homes can make it difficult for retired adults to pay for their long-term care.<\/p>\n

Many adults worry that the assets they put aside for their loved ones will be taken to pay for nursing home costs. The truth is that certain assets can be taken to pay a nursing home. However, with proper planning, it is possible to cover nursing home costs without depleting assets in an irrevocable trust.<\/p>\n

What Is Irrevocable Trust?<\/h2>\n

An irrevocable trust is a type of trust with terms that cannot be amended, modified or terminated without the permission of the trustor\u2019s named beneficiaries. This differs from a revocable trust which can be modified or cancelled at any time by the trustor. Irrevocable trusts offer several major perks, such as asset protection from future lawsuits and creditors.<\/p>\n

There are two main types of irrevocable trusts \u2013 a living trust<\/a> which is created when the trustor is alive and a testamentary trust which is created upon a person\u2019s death. A testamentary trust is funded from the deceased\u2019s estate based on the terms of the will. An irrevocable trust can deliver many benefits, such as estate tax exemptions and the prevention of asset misuse by beneficiaries.<\/p>\n

Medicaid and Your Assets<\/h2>\n

Medicaid is primarily used to pay for nursing home care. However, Medicaid eligibility is based on a person\u2019s income. If you do not have adequate funds to cover the cost of long-term care, Medicaid will look at your assets. In 2024, you must earn less than $2,829 per month in income and have less than $2,000 in total countable assets to be eligible. Not all assets are counted when determining Medicaid eligibility.<\/p>\n

Countable assets include:<\/p>\n