People sometimes make inaccurate assumptions about various estate planning instruments. With this in mind we would like to take a look at a couple of misconceptions that are harbored by some individuals about revocable living trusts.
The perception is that you are divesting yourself of personal ownership of the resources that you place into the trust. This can lead some people to believe that assets that have been placed into the trust are not subject to attachment by creditors or claimants.
In fact this is not the case. Because of the fact that the trust is revocable you have total control. And, in most cases the grantor of the trust will act as both the beneficiary and the trustee while he or she is still alive.
With a revocable living trust you retain incidents of ownership. Because of this the assets are indeed fair game for interested parties.
The other thing that we would like to look at here is the matter of Medicaid eligibility. Medicaid will inventory your financial assets in an effort to determine whether or not you are eligible for the program if you seek eligibility to pay for living assistance.
Once again, because you are retaining incidents of ownership any resources that you placed into a revocable living trust will indeed be counted by the Medicaid program as they are making a determination with regard to your eligibility.
Revocable living trusts are not asset protection vehicles, but a good estate planning lawyer can implement different techniques that will in fact protect your assets. And while a living trust won’t help, with the assistance of a savvy elder law attorney you can also take specific actions to angle toward Medicaid eligibility without losing a lot in the process.