Will a revocable living trust protect your assets from a nursing home and Medicaid?

Attorney Tom Olsen: We've been doing trust in the office for 30 years. We're using trust for the purposes of avoiding probate, but a lot of people are in a misunderstanding that using a trust is also going to protect their life savings and assets from nursing homes.

Attorney Robert Hidock: Tom, I've gotten that call probably three times this week. "Robert, I need to set up an appointment. I need to set up a trust for my mom to protect her assets."

Attorney Tom Olsen: You hear people talking about trust out there, they're all talking about the same thing, a revocable living trust. That trust is used for the purpose of avoiding probate. It is not used to protect your assets from creditors, doctors, hospitals, credit cards, bankruptcy or nursing homes. It is simply a tool to avoid probate.

Now, if you're saying, "Oh gosh, there's nothing we can do then." Well, no. There are some great tools that we have, Medicaid-compliant tools to protect your life savings from nursing homes. A trust might be part of the package for avoiding probate purposes, but it's not going to be the tools that we're going to use to protect people's assets from Medicaid. Those tools generally are a qualified income trust and a personal services contract.

Attorney Robert Hidock: Right. When we do use our Medicaid-compliant tools or our personal service contracts, we try our best to replicate the estate plan that you worked so hard to put together.