Now that we have spent some time addressing the pros and
cons of a revocable trusts ( or living trusts) as they pertain to Medicaid
eligibility in Colorado, it is time to begin thinking about another kind of
trust – the irrevocable trust.
An irrevocable trust differs from a living trust in that the creator of the trust is not allowed to make changes to it or revoke it after it has been established. Unlike the living trust, an irrevocable trust may be an ideal option for individuals and couples whose primary goal is to become eligible for Colorado Medicaid.
One of the first points to consider in the design of a trust is its relationship to gifting rules. If an asset held in a trust can still be “returned” to the creator of the trust, for any reason what so ever, then Colorado Medicaid will continue to treat it as an available asset that can be used to determine eligibility. While a living trust will not run afoul of any of Medicaid’s gifting rules, it will not necessarily improve your chances of becoming eligible for Colorado Medicaid.
For those of us who are already familiar with the five year look back rule, the irrevocable trust presents a unique opportunity. “Gifts,” of any size or any quantity, made to an irrevocable trust will essentially become invisible to Colorado Medicaid after five years.
It is like Confucius said – “The smart man will dig his well before he gets thirsty.”
Call (303) 945-3242 today to get in touch with a Colorado Medicaid attorney who can help create an asset protection plan that is uniquely tailored to your needs. You can also visit our Medicaid website or attend a live seminar to learn more about estate planning tools and Medicaid crisis planning.