When someone needs to move into a nursing home, the cost can be really high — and MassHealth (which is Massachusetts’ Medicaid program) helps pay for it only if the person applying doesn’t have too much money or assets. That’s why many people try to protect their money ahead of time, and one way to do that is by using a trust. But not all trusts are created equal — and not all of them protect your money from MassHealth.
First, What’s a Trust?
A trust is like a special container where you can put your money or stuff (like a house or bank account). This container is managed by someone called a trustee, who makes sure it’s used the way you want. Some trusts are built so you can still reach in and grab your stuff — others are built so you can’t.
Trusts That Don’t Work:
Revocable Trusts ❌
- A revocable trust is one where you can take your money or property back anytime. It’s kind of like hiding your money under your mattress—MassHealth knows it’s still yours.
- MassHealth counts everything in a revocable trust.
- It won’t protect your assets from nursing home costs.
- You’re better off ending the trust and spending down the money on allowed things (like medical expenses or burial costs) before applying.
Trusts That Can Work:
Irrevocable Trusts ✅
An irrevocable trust is different. Once you put something inside, you can’t take it back. It’s locked, and you no longer control it.
- Because you don’t control it, MassHealth may not count what’s inside.
- But—and this is super important—timing and structure matter a lot.
The 5-Year Rule:
What You Need to Know
Let’s say you put your house or savings into an irrevocable trust. MassHealth looks at when you did that.
- If it’s less than 5 years before you apply:
- MassHealth will count those assets.
- You could face a penalty period where you won’t get help, based on how much you transferred.
- If it’s more than 5 years before you apply:
- The assets may be protected, but…
- MassHealth will still review the trust to make sure it’s structured correctly.
Bottom line: Even after 5 years, they check everything to make sure it follows the rules.
It Has to Be Set Up the Right Way
- Not all irrevocable trusts are the same.
- If it’s not written or managed correctly, MassHealth can still reject it.
- Always have a lawyer who knows MassHealth rules help set it up.
What About Funeral Trusts?
Good question! Some trusts are meant to be used for funeral and burial expenses. These are okay and don’t count against you when applying for MassHealth.
Bottom Line
If you want to protect your home or savings from long-term care costs, don’t wait. You need to set up the right kind of trust, the right way, and at least five years before you apply for MassHealth. Always work with a lawyer who understands the rules, because one mistake can cost you big time.
Want to learn more about planning ahead or protecting your family’s future? Visit ViewAllOptions.com — we make these hard topics easier to understand and help guide you every step of the way.
