Liquidating assets before
Although a portion of the funds from the original trust “pour over” into the deceased spouse's estate, the testamentary trust included in his will protects that money from being seized to pay nursing home expenses.This provides financial protection for both you and your spouse regardless of which of you dies first.Testamentary trusts, which only become active after your death, can protect assets from your beneficiaries' creditors.However, living trusts, created during your lifetime, only provide protection from lawsuits against you if the trust is irrevocable.Unfortunately, this leaves you without the financial security you previously enjoyed if you decide to return home.
An irrevocable Medicaid trust is a permanent agreement made by the trustor, or owner, that establishes control and management of her assets while she's still alive.
The goal of forming an irrevocable Medicaid trust is to allow the trustor to keep her assets for her heirs while still qualifying for Medicaid insurance coverage for long-term medical care later.
Medicaid, a state-administrated medical assistance program for low-income persons, has both income and financial resource limits for recipients.
Upon the filing of a Chapter 7 bankruptcy petition, all of your assets are automatically placed under the custody of a court-appointed trustee and placed into a legal entity called a bankruptcy estate.
Because of this legal process, all property that you owned at the time you filed for bankruptcy may no longer be your property to sell, depending on whether it is exempt from liquidation by the trustee.