How do trusts, including revocable living trusts, affect the ALTCS (long-term Medicaid) process?
This is a wonderful question, and surprisingly complex. First, we need to point out that there are a bewildering variety of trusts being used for a complicated range of purposes. Some (like the so-called “Miller” trust) are used precisely to secure ALTCS eligibility, or to maintain eligibility in the face of high income or receipt of funds. Some are not intended to affect eligibility at all, but may inadvertently delay or prevent ALTCS assistance with long-term care costs. The most common type of trust, the joint revocable living trust signed by a husband and wife long before either became ill or even contemplated long-term care costs, may actually benefit the community spouse in a surprising and unintended way. The analysis is complicated, and may not apply in every instance, but the basic point is this: if a couple of modest means establishes a living trust and transfers their home to the trust before ALTCS eligibility is in question, the community spouse may later be able to retain
