Trusts and medicaid

[ibarry]

Alabama--If my father creates a trust for each of his 3 adult children, are those trusts exempt from paying for a nursing home before medicaid kicks in?

 

[Taxing Matters]

Alabama--If my father creates a trust for each of his 3 adult children, are those trusts exempt from paying for a nursing home before medicaid kicks in?

If he creates and funds trusts that are not revocable and that he doesn't have great control over then the funding for those trusts would be treated just like outright gifts made to his kids. If those gifts are made within the 5 year look back period for Medicaid then what happens is that he is denied Medicaid coverage for a period of time. Basically, the government will treat him as though he still had those assets to pay for his care. But the government does not go after the kids to recover the assets he gave them.

 

[ajkroy]

Just clarifying: it would be Medicaid, not Medicare.

 

[Taxing Matters]

Just clarifying: it would be Medicaid, not Medicare.

Thanks for the clarification. I updated my reply to correct the one incorrect reference I made to Medicare.