Many of our clients ask us about the use of irrevocable trusts in Medicaid planning. To begin with, it is possible to gift assets outright - not involving an irrevocable trust - to achieve asset protection. Such gifts are advantageous in that they are administratively simple to do, potentially involving only the cost of preparing deeds and filing of a tax return. Most banks have in-house documents they use for the change of ownership of assets, and therefore require no out-of-pocket cost.
With that being said, why incur the cost to establish a trust? The answer is to not be "pennywise and pound foolish."
There are many important benefits that can result from the use of a trust as opposed to outright gifting:
As you can see, while establishing a trust is more costly and time consuming than making outright gifts, a trust can have several advantages that make the added time and expense worth the effort.
Jeffrey J. Rokisky is an elder law attorney with offices in Wheeling, Weirton, Elkins, Clarksburg and Robinson Township. If you would like to submit a question for publication, please email it to rrokisky@ rokiskylaw.com