[WSBAPT] Irrevocable Trust to Protect Assets from Medicaid Recovery?

[David Faber]

Good afternoon,

I'm working with a couple to prepare an estate plan and they are
particularly concerned about medicaid recovery.

They're nearly a generation apart and the younger spouse has no children of
their own. The older spouse has children from a previous relationship and
has dual concerns: (1) the older spouse want to make sure their younger
spouse can live in their family home for life and have access to the older
spouse's assets for the usual M.E.S.H. purposes and (2) the older spouse
wants to ensure that as large a percentage of the older spouse's assets
pass along to the children as possible.

The younger spouse is going to be able to care for the older spouse when
the older spouse's time comes, but the younger spouse will probably need
medicaid, which is where we get to the issue of asset preservation.

If the couple plans on living in the current home for the rest of their
lives, would an irrevocable trust that guarantees they have a lifetime
tenancy with the children as remainder beneficiaries, and only the children
having the power to sell the property, work to protect the home from
medicaid recovery, provided the couple agreed to such an irrevocable trust
arrangement?

Any other tools to protect assets from medicaid recovery? I'm still trying
to wrap my head about exactly how medicaid recovery functions. Is there any
way to grant the younger spouse some specific access to financial resources
in a trust arrangement without subjecting those same assets to medicaid
recovery?

Best,
David J. Faber
Faber Feinson PLLC
210 Polk Street, Suite 1
Port Townsend, WA 98368
(360) 379-4110

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