Do Not Use Funds from an Irrevocable Trust to Cover the Cost of an Assisted Living Facility

New Jersey irrevocable trust lawyerOftentimes, individuals will put the proceeds from the sale of a house into an irrevocable trust.  When the time comes, an elderly person may move into an assisted living facility, which can be expensive. A trustee of an irrevocable trust may look to use the funds in an irrevocable trust to cover the cost of the assisted living facility. However, the money in an irrevocable trust should not be used to pay for care in an assisted living facility.  The reason being is that an irrevocable trust is only exempt for Medicaid purposes when there are no principal distributions being made to a grantor or in this case to an assisted living facility on an individual’s behalf because doing so would violate the terms of a trust.

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