An irrevocable trust is a long-term asset protection strategy that transfers ownership of certain property out of your personal estate. Because the transfer is intended to be permanent, those assets are generally no longer considered available to you when determining benefits.
Georgia families often turn to this planning tool when a parent’s health is declining, and Medicaid may soon become necessary to pay for long-term care. Along the way, questions arise about things like the five-year look-back period and what happens to a home placed in trust.
You don’t have to sort through these decisions on your own. Our estate planning lawyers in Marietta have served hundreds of Georgia families. Call Nelson Elder Care Law to schedule a free Legacy Planning Meeting.
How an Irrevocable Trust Works
When you set up an irrevocable trust, you give away ownership of specific assets, like your home or savings account, to the trust. You are no longer the legal owner; instead, a trustee whom you choose takes on that role.
That trustee manages the assets according to the instructions you wrote when you created the trust. You can still benefit from the property in many cases, such as living in the house or receiving income it generates, but you no longer control it the way you once did.
When planning for Medicaid, an irrevocable trust can be helpful. It allows you to keep your assets out of your legal ownership so they do not count against you for long-term care benefits. Our team at Nelson Elder Care Law can explain your options for a trust.
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Irrevocable Trust vs. Revocable TrustA revocable trust allows you to make changes whenever you want. You can add or remove assets, change the trustee, or dissolve the trust. On the other hand, an irrevocable trust does not let you make changes once it is signed and funded.
That difference is significant when Medicaid eligibility is at stake. Because you can still access and control assets in a revocable trust, Medicaid treats those assets as yours. Irrevocable trusts don’t carry the same risk.
Deciding between the two options is not just a legal matter; it also involves how much control you are willing to give up for protecting your assets. Our estate planning attorneys at Nelson Elder Care Law can help you understand both options and offer another solution.
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The Absolute Protection Trust™
At Nelson Elder Care Law, we offer something most firms can’t. Our Absolute Protection Trust™ is a proprietary trust that combines the asset protection of an irrevocable trust with some of the flexibility of a revocable trust.
A revocable trust is easy to manage, but it won’t protect your assets from nursing home costs or Medicaid spend-down. The Absolute Protection Trust™ removes this risk while helping your family avoid the delays and costs of probate court.
A trust owns your assets, not you. This way, your home and savings go directly to your loved ones when you pass away. Your family gets protection while you are alive and a smoother transition after you’re gone.
Understanding Georgia’s Five-Year Medicaid Look-Back Period
Georgia Medicaid looks back at the five years before you apply for benefits. They check for any transfers of assets, including transfers into an irrevocable trust. If you add money to the trust during this time, you might have to face a penalty period. Common situations that can lead to this scrutiny include:
- Transferring a home into the trust shortly before applying for benefits.
- Moving large sums of savings into the trust within the five-year window.
- Gifting money to family members around the same time the trust is funded.
This is why planning early matters. An irrevocable trust set up years in advance avoids the look-back penalty altogether. The Nelson Elder Care Law Absolute Protection Trust™ gives you the same strong protection while retaining the ability to make important decisions.
Common Irrevocable Trust Errors
Irrevocable trusts often fail because of how they’re set up, and a few mistakes happen more frequently than others.
- One of the biggest irrevocable trust errors is waiting until a health crisis occurs to begin the planning process, which can significantly limit your available options.
- Another common mistake is funding an irrevocable trust with assets that do not actually need the protection the trust is designed to provide.
- Choosing a trustee who is not prepared or capable of managing the responsibilities of the role can create unnecessary complications and undermine the trust’s effectiveness.
When you turn to Nelson Elder Care Law, you’ll work with a personalized team that oversees the creation and funding of your Absolute Protection Trust™. With something as serious and personal as your legacy, there is no room for errors.
Get Help With Your Estate Planning
An irrevocable trust is a legal tool that permanently removes assets from your name so they will not be counted against you if you ever need nursing home care. That permanence is exactly what worries families because once you sign, you generally can’t take the assets back.
Many Georgia families begin exploring irrevocable trusts when they believe an aging loved one may eventually require nursing home care, and they want to preserve a lifetime of savings. Wherever you are in the process, our team can help.
For more than a decade, Nelson Elder Care Law has partnered with Georgia families to develop customized strategies aligned with their financial goals and future care needs. Contact our office today to schedule a free Legacy Planning Meeting.
