Article on Medicaid Irrevocable Income-Only Trusts

Leo J. Cushing & Todd E. Lutsky recently published an Article entitled, Designing the Perfect Income-Only Irrevocable Trust, Estate Planning 1 (2017). Provided below is an abstract of the Article:

Careful drafting and funding of trusts can help clients qualify for Medicaid benefits and continue to make use of trust assets. The biggest question on the minds of elder law attorneys these days is whether to use Medicaid irrevocable income-only trusts as a planning tool. It is no secret that across the country these trusts are being challenged by the states more than ever. Thatbeing said, a recent series of cases and developments acknowledge that these type of trusts are an acceptable planning tool to protect assets from the costs of long-term care, provided however; that they are carefully drafted so as not to violate the federalor state laws governing these trusts. The balance of this article explains the important paragraphs to use as well as the paragraphs to avoid when drafting these trusts, along with income, gift, and estate tax ‘do’s and don’ts‘ when operating themduring the donor’s life.

References to state developments in this article frequently cite Massachusetts, as that is the state in which the authors practice. Readers should consider how the laws of their jurisdictions may differ when implementing the plannin