A Medicaid Trust can protect your home from long-term care expenses, so that it will pass to your family, and not to a nursing home.

The cost of nursing home care in Massachusetts is around $11,000 per month. At that rate, even seniors that have saved for their whole lives are in jeopardy of losing their nest eggs. And when your life savings have been depleted to pay for your care, then you can apply for Medicaid (called MassHealth in Massachusetts), which will cover your future care expenses.

In order to qualify for MassHealth, your liquid assets have to be under $2,000, or $3,000 for a married couple. MassHealth will not take your primary residence while you are still alive, but they may require your estate to sell it to repay the cost of your care once you are deceased.

Fortunately, by placing your home in a Medicaid Trust, you can protect it from MassHealth Estate Recovery, so that it will pass to your family when you die.

A Medicaid Trust is also known as an Irrevocable Income-Only Trust. Legally speaking, by placing your home into this type of trust, you are foregoing access to the principal of the trust, but you maintain the right to all income from the trust. Because you cannot access the principal of the home, neither can MassHealth.

For a residence, the right to income means the right to use and occupancy. Therefore, because you have the right to use and occupy your home, the Medicaid Trust has virtually no impact on your lifestyle. This makes it an attractive technique for many seniors.

The main caveat is that MassHealth imposes a five-year disqualification period following the transfer of a home to a Medicaid Trust (called the 5-year lookback). So in order for this technique to work, you would have to wait five years from the transfer until you apply for MassHealth. If you are in relatively good health now, or you have the means to privately pay for your care until the lookback expires, then this technique could very well save your home.


We're glad that you're using this website to educate yourself about these important issues. While it may seem daunting, the most important step is as simple as a phone call or email.


The Law Office of David E. Peterson


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Beverly, MA 01923

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Burlington, MA 01803