Dear Clients and Friends:
Do you always need a Medicaid Irrevocable trust? This client raises this commonly asked question.
Dear LAWRENCE, I read your newsletter all the time and also bought your book but cannot find this answer: what happens if your one beneficiary predeceases you and you have no one else you want to leave your house and other assets to? I’ve been putting off doing a Medicaid trust because of this but I’m not getting any younger so can you please explain. Thank you for considering.
First things first. Not everyone needs an irrevocable Medicaid trust. The affluent elderly can pay for their own care and the poor elderly have nothing to protect. As usual, protecting assets from Medicaid is a working-class to upper-middle-class elderly issue.
Assuming you have assets to protect, such a trust may or may not be appropriate for you. Ask yourself, “What am I really trying to accomplish?” Do you really care about protecting assets for others? In the question above, who are you trying to protect assets for when there is no child or grandchild? Perhaps nieces and nephews, perhaps friends, perhaps charities? Few clients worry about protecting assets in these circumstances, but some do.
On the other hand, this client should come talk to me right away to discuss the appropriateness of a trust under their unique circumstances. Chances are that this type of trust will not be necessary but perhaps another type will be, like a revocable trust to avoid probate.
The bottom line is, don’t hesitate to do your planning. The fact that one type of planning may not be appropriate doesn’t mean another type shouldn’t be considered. The questioner above should certainly be thinking about other beneficiaries, including charities.
I hope this helps! Please forward this information to your friends and relatives to share these informative answers to some very commonly asked questions.
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Until next time…
peace, health and happiness,
Lawrence Eric Davidow