Ohio Elder Law Attorney Uses Irrevocable Trusts to Guard Assets from Nursing Homes
May 16th, 2012
In Ohio, elder law attorneys commonly transfer ownership of clients’ assets to irrevocable trusts to protect them from Medicaid, nursing homes, creditors and lawsuits — the clients control them but don’t own them, so they can’t be taken away.
An irrevocable trust is a legal entity created for the purpose of holding and managing assets that cannot be changed or dissolved once created. A revocable trust, by contrast, is similar but it can be changed or dissolved by the grantor (the person who created the trust) at any time during his or her life.
The main advantage that an irrevocable trust offers clients of Ohio elder law attorneys is that because the client no longer owns any assets transferred to the trust, the trust assets cannot be claimed by Medicaid for nursing home expenses.
Two More Ways an Ohio Elder Law Attorney Can Use Irrevocable Trusts
When prepared properly by an Ohio elder law attorney, this kind of trust can also protect the assets against being squandered away by the beneficiaries after the grantor’s death. Through the terms of the trust, the grantor can control when beneficiaries receive money for the trust and what they can spend it on.
For example, a trust’s terms can dictate that beneficiaries under age 18 at the time of the grantor’s death not receive funds until their 25th birthday or whenever the grantor thinks they are old enough to handle the money responsibly. Or the trust’s funds can be disbursed every five or 10 years, to keep all the money from being spent at once. A grantor could also require that the funds be spent on meaningful purchases, such as education or a family home. This prevents irresponsible beneficiaries from squandering the funds on things like fast cars, big parties or luxurious vacations.
When used in combination with other legal entities, like a limited liability company (LLC), an irrevocable trust can keep assets protected while also providing the grantor with access to and control of the assets (and any income they provide) during the grantor’s life. For example, ownership of a person’s assets can be transferred to an LLC, the LLC transferred to the trust, and the grantor made CEO of the LLC. In such a case, even though the assets are not owned by the grantor (and therefore not accessible to Medicaid, nursing homes, or creditors), the grantor still has access and control because he or she is CEO of the controlling company inside the trust.
However, because of the complexities involved, taking advantage of all the possibilities and opportunities available through a trust requires the skill and expertise of a knowledgeable Ohio elder law attorney. In Ohio, the elder law firm of Gudorf Law Group, LLC, can assist in using an irrevocable trust to protect your assets from Medicaid, nursing homes and other losses. Call Ohio elder law attorney Ted Gudorf at 1-877-483-6730 to schedule a free consultation regarding protection of assets and Ohio Medicaid eligibility.