Does my living trust protect my property from being taken if I need to go to a nursing home?

This question really asks (1) whether the assets in your estate plan get “counted” toward your eligibility for government-paid long-term-care (Medicaid), and (2) if you qualify for and receive Medicaid, whether the government will seek to recover the funds it paid for your care after your death.  

Note: contrary to popular belief, no nursing home “takes” your assets; it provides round-the-clock care, housing, and meals, and sends you or your estate an invoice usually not covered by insurance.  Like any other service provider, the nursing home expects to be paid and if it is not paid, has the same creditor rights as any other business.   

The answer is yes, the assets in your estate plan get “counted” toward your eligibility.  The purpose of a living trust is to maximize flexibility with your assets during your life while allowing the distribution of your assets without probate at your death.  A living trust is not the type of trust that shelters assets (i.e., removes assets from your control so they are not “counted” as “yours”).  

In our experience, most estate planning clients have enough assets and are healthy enough that possible future nursing home admission does not dictate their choices.  Most prefer to use their assets on themselves, including to pay for assisted living or in-home health care (neither of which is typically paid by Medicaid).

However, if you are in a position where nursing home admission must drive your choices, there are tools available to plan for Medicaid eligibility.  The rules always change, so you should see an attorney who focuses their practice on this area.  We have one at Kendricks Bordeau.  To learn more, please contact us.