Idaho Law Blog
Most trusts do not protect assets from a grantor’s creditors. Contact an experienced estate planning attorney to review your trust documents for answers regarding the creditor protection your trust may provide.
The overwhelming majority of trusts in place today are known as revocable living trusts (RLT). Most RLTs provide benefits, including the seamless transfer of control in the event a grantor becomes incapacitated or dies. Most RLTs do not protect assets from creditors even though the assets may belong to the trust (i.e., a residence is deeded to the trust). The reason for this lack of creditor protection lies in the fact that the trust is revocable – meaning, the grantor (the person(s) placing the assets into the trust) may revoke the trust, or a portion thereof, and regain direct control of the assets. Thus, the assets are available to the grantor to satisfy obligations to creditors.
The Idaho Department of Health and Welfare will also consider assets belonging to an RLT as assets of the individual applying for Medicaid benefits. Generally, the assets are available to the applicant if he/she simply revokes the trust. As a result, persons seeking Idaho Medicaid eligibility will likely not meet the Medicaid resource eligibility requirement if they simply transfer their assets into an RLT. Contact an experienced Idaho Medicaid planning attorney to plan for the long-term care of your elderly loved ones.
It is important to have your estate planning documents reviewed on a regular basis to ensure the documents meet your needs. Contact an experienced Idaho estate planning attorney to ensure your trust provides you with the benefits you desire. Contact an experienced Idaho Medicaid planning attorney if you or your loved one is in need of long-term care and lack the resources to pay for the care yourself. The right trust can provide you with important benefits; however, not all trusts are created equally.