Protecting Your Life Savings Against the Cost of Long-Term Care: Irrevocable Trusts

Trusts are among the most powerful tools in the estate planner’s toolbox.  The benefits of a trust include probate avoidance, greater privacy, and expedition of estate settlement.  They can also establish specific parameters for the use of your assets during your lifetime and after you pass away, allowing greater customization of your estate plan.
While there are many different types of trusts, we can break them down into two basic categories: revocable trusts and irrevocable trusts.  Revocable trusts provide greater flexibility since you can make changes to them whenever you wish.  However, if your primary goal is to protect assets from the high cost of long-term care, an irrevocable trust may be the better choice.  That’s because assets held in a revocable trust are available to the Grantor (the person writing the trust – you) and MassHealth insists those assets must be used to pay for long-term care.  This is not the case with an irrevocable trust.  MassHealth cannot access irrevocable trust assets as long as the trust is properly designed, implemented, and funded.
Assets that can be placed in an irrevocable trust include real estate, cash, investments, life insurance policies, a business, and more.  In addition to preserving assets from the costs of long-term care, irrevocable trusts can protect assets from creditors and provide for loved ones who are minors, financially irresponsible, or who have special needs.
Is an irrevocable trust right for you?  As always, I’m here to help you decide and to work with you on an estate plan that meets your needs and achieves your goals.
Until next time, take care….

If I have created a plan for you and you are happy with it, the best compliment you can give me is to recommend my firm to family and friends.  As you know, everyone should have an estate plan.