| You've probably gotten a postcard or seen an ad for | | | | benefit. |
| a seminar on "Living Trusts" and all the benefits they | | | | Since you basically have to withdraw all the Trust |
| supposedly offer you. Basically, a Living Trust is a trust | | | | assets and retitle them back into your own name, as |
| you create and fund during your life and which you | | | | you can see it makes absolutely no sense to pay an |
| retain the ability to change and revoke at any time. | | | | attorney to create a Living Trust for you if you are |
| They have their place and can be quite useful, in the | | | | single and facing long-term care, and if you think that |
| right circumstances, but the question of today is | | | | you may need or want to apply for Medicaid at some |
| whether they are useful if you may be applying for | | | | point. |
| Medicaid. | | | | If you are married, it is possible for the Community |
| The problem with Living Trusts for someone applying | | | | Spouse (i.e., the spouse not in the nursing home) to |
| for Medicaid is that everything titled in the name of the | | | | have assets titled in the name of a Living Trust, but |
| Living Trust is considered an available asset, even if it | | | | there is usually little advantage to doing so in a state |
| was exempt outside of the Living Trust. For instance, | | | | like Colorado which has relatively inexpensive and |
| your home is exempt (up to $500,000), but if you deed | | | | simple probate procedures. |
| it into your Living Trust, it suddenly loses its exemption. | | | | As a matter of fact, there is a type of trust that the |
| That alone can cause you to become ineligible for | | | | Community Spouse can set up to be funded after the |
| Medicaid, forcing you to deed your house out of the | | | | death of the Community Spouse, which can hold |
| Trust back into your own name. The same would be | | | | assets for the benefit of the nursing home spouse yet |
| true of your car or even your other personal property. | | | | not count against that spouse's Medicaid eligibility. |
| Now bank accounts and investments can certainly be | | | | However, such a trust cannot be used in a Living Trust |
| titled in the name of the Living Trust, since such assets | | | | and can only be used in a Will. |
| are countable whether they are titled in your name or | | | | So the lesson of all this is that Living Trusts may be |
| in the Trust's name. However, if you are single, you will | | | | useful for general estate planning purposes but are |
| have to spend down those assets in any case, in | | | | inappropriate--or worse--in a Medicaid planning situation. |
| order to qualify for Medicaid, so that's a dubious | | | | |