We can answer this common question, “Can the nursing home take my living trust assets?” in one word. “Yes.” Assets titled in your own living trust (or in your name) can be taken by the nursing home. They must be spent first, before you can qualify for MediCal to pay for your nursing home care. This means that the assets must be spent down for living expenses, nursing home care, or exempt assets before MediCal kicks in.
Nursing Home Planning Strategies
However, there are other ways to protect your assets and the sooner you meet with an estate planning –elder law attorney, the more options you have and the more money you can protect. Common nursing home planning strategies include long term care insurance, income only trusts, gifting programs, annuities, and the purchase of exempt assets such as a new roof for the house, a television for the room, and a lift chair as well as paying off the mortgage or car.
Are You the Beneficiary of Someone Else’s Living Trust?
On the other hand, if you know you’re someone else’s beneficiary, you may want to have a chat with him or her and ask that the assets come to you in an asset protected beneficiary trust. If you receive assets in trust, they can’t be taken by the nursing home, divorcing spouse, or another creditor.
Conversely, if you receive an inheritance or gift outright, in your individual name, it can be taken by the nursing home, divorcing spouse, car accident creditor, bankruptcy creditor, and the like.
A Loved One Can Give You Protection You Can’t Get for Yourself
While your own revocable living trust cannot protect against your creditors such as the nursing home, someone else’s can. Consult with a qualified estate planning attorney to determine the best way to own your assets, plan for nursing home care, and give/receive an inheritance or gift.
Legacy APC, A Trusts & Estates Law Firm is a member of the American Academy of Estate Planning Attorneys.