Asset Protection via Revokable vs Irrevokable Trusts
Five years ago we proceeded with estate planning for my sole remaining parent. This included establishing Health Proxy, Durable Power of Attorney and a Family Trust, including a Declaration of Realty Trust to which her home was transferred via Quitclaim Deed, believing this would help preserve her modest assets of about $350K. Within the Trust, there is an amendment making the trust revokable by the trustee (our parent), with the stipulation that she could revoke the trust (since she is Donor & Trustee) ”UNLESS INCAPACITATED.” Well, 4 months ago, she was diagnosed with Alzheimer’s and her condition was so poor we had to place her in the dimentia unit of an Assisted Care facility. Because of Psychotic drugs she is on, we obtained a Rogers Guardianship of our mother. The original attorney believes the Trust as arranged with the revokable amendment ”unless incapitated” provides her with asset protection from medicare in the event she must be further institutionalized in nursing home care. A new attorney I have used to execute the current Rogers Guardianship states that the revokable amendment in the trust renders it useless for asset protection. What can you tell me about this before I proceed seeking an answer. Thank you very much.
Re: Asset Protection via Revokable vs Irrevokable Trusts
Without reviewing the language of the Trust, I cannot be sure, but it would appear to me that the new attorney may be correct.
If the property is in a revocable trust or medicaid takes the position it is a revocable trust at the time she sought medicaid, you have a problem.
However, you have to have the language carefully reviewed. Do not simply rely on your description. If the old attorney thinks he is correct, ask him on what basis.
Please feel free to contact me, but it would appear you have enough attorneys already.
Jonathan Roth
Donovan Hatem LLP
Two Seaport Lane 8th floor
Boston, MA 02210