Does a living trust protect your assets from the cost of a nursing home?

Attorney Tom Olsen: Robert here's a text and it says that his dad has a trust. Will that protect his assets from a nursing home? Robert, I get that question all the time. People think trusts are a way to protect their assets from creditors and nursing homes. No, it's not a typical trust, it's only about avoiding probate.

Attorney Robert Hidock: Correct. The rule of thumb is, if an asset is countable outside of a trust, it's countable inside a trust. The only trust that will work is, if we created an irrevocable trust subject to the five-year lookback role because you're giving the trust money. It's got a clear five years but if you're the grantor, you're not allowed to be the beneficiary, you're not allowed to be the trustee. The trustee is not allowed to give the grantor one penny. Most people are not going to lock all their money up for five years and not have any access to it.

Attorney Tom Olsen: Folks, when you're out there and you hear somebody says, "Hey, I've got a trust." They are all talking about the same thing. It is a revocable living trust. It is a tool to avoid probate and a great tool for avoiding probate. It will not protect your assets from creditor claims, doctors, hospitals, credit cards, automobile accidents, nursing homes. It is not for that purpose. It's only for the purpose of avoiding probate. I just want to make that very clear to you. If you've got a question about that, we're pleased to assist you.

Now, at the Olsen Law Group we're all about helping people to avoid probate. Usually we're using simple tools but sometimes we use a living trust for people to avoid probate, especially if they got a real estate and other estates. When they got very young beneficiaries like children or grandchildren they want to include in their estate plan, then we would be using a living trust.