What is the difference between an Irrevocable Trust and a Revocable Living Trust?
Both Revocable Living Trusts and Irrevocable Trust can protect you from probate if they are properly funded (all assets have been transferred into the trust or titled in the name of the trust). However an Irrevocable Trust can protect your assets from long term care costs such as an extended stay in a nursing home while a Revocable Living Trust will not protect your assets from long term care costs. If you have a Revocable Living Trust any asset in this trust will not be protected from Medicaid but will in fact disqualify you from Medicaid because you have “Too Many Resources”. If you are looking to protect assets from long term care costs you would choose an Irrevocable Trust rather than a Revocable Living Trust. If your only concern is avoiding Probate then a Revocable Living Trust will do.
I’m in relatively good health now. What can do to I protect my assets from Long Term Care Costs?
The best way is with Long Term Care Insurance. If this is not affordable or due to poor health you cannot qualify for Long Term Care Insurance then we must look at other options.