Myth or Fact? My house is in a trust so it is protected from nursing homes.
This could be a MYTH!
First, let’s define “protected from nursing homes.” Most people, when they say this phrase, are referring to an asset being non-countable after the five-year look back period. Current Medicaid, called “MassHealth” in Massachusetts, statutes say that if an asset is in a qualifying Irrevocable Trust then five years after that asset was transferred into the trust, that asset no longer counts towards the calculation of eligibility for MassHealth to pay for nursing home care.
Many people consider putting their primary residence in a qualifying Irrevocable Trust, but any asset can be transferred into this type of trust. The key word here is “qualifying.” An Irrevocable Trust must meet certain criteria in order to qualify for the five-year look back period to begin. Simply transferring your house to any trust will not trigger the look back period. First and foremost, the trust must be irrevocable. It must be clearly written into the trust that the trust cannot be revoked. Additionally, the grantor, the person(s) creating the trust cannot be the beneficiaries. If you are looking to start the five-year look back period, you must relinquish the beneficial interest in the asset.
The above rules are just two of many specifications that an Irrevocable Trust must include in order to qualify as an Irrevocable Trust that triggers the five-year look back period. If you are confused by these rules or do not know if your trust qualifies with regard to the MassHealth look back period, feel free to reach out for a review of your estate plan.
Elizabeth A. Caruso, Esq. is an attorney at Legacy Legal Planning, LLC, in Norwell, Massachusetts. She has been practicing estate planning, probate, and elder law on the South Shore for over a decade. If this article has sparked questions for you, please feel free to reach out via phone 781-971-5900 or email elizabeth@legacylegalplanning.com to schedule a time to discuss your unique situation.
