Irrevocable Trust - waiting period?

[IRM]

Hoping the group might be able to provide some insight to help me better understand our situation.

My in-laws have recently, a little less than 2 yrs ago, set up a irrevocable trust. This was unknow to us and the rest of their kids until within the last 6 months.
I understand that they have done this for asset protection.

Because they are my in-laws, and pretty private people. I don't know a lot of detail about the total financial picture and they are not ones to share a whole lot. But also, I fear are don't always make the best (most informed) decisions. They have some nominal real estate (~$400K) and ok retirement to "live" comfortable at an equivalent of $70K income.

They are mid/late 70's. However my FIL has some very debilitating conditions; diabetes and most concerning Parkinson's. Of which the Parkinson's has progressed very rapidly over the past 12 months. MIL is in ok health.

The concern that has come up and here is where I'm confused and can't ask a lot of direct questions to them, is something about a "5 year waiting period" for the irrevocable trust. Because of the rapidly progressing Parkinson's my FIL will likely need expensive care soon. The concern is that this will then drain their finances because they don't have any coverage to pay for that type of care. And if he may end up in nursing care that too will drain them.

Can anyone help me understand this "waiting period" so that we can help them through their finances? Many thanks for all insight.

[afan]

Probably referring to the government paying for nursing home care once assets are depleted. By giving money to such a trust it is out of the ownership of the elderly person. Government then will not count it in determining whether the person is poor enough to qualify for assistance. There is a 5 year lookback period on this. Money given to the trust up to 5 years before is counted as belonging to the couple/person.

Thus, it is a way to protect the assets from depletion paying for long term care. From what you describe, it may be too late.

In any case, there is nothing you can do about it.

[IRM]

Probably referring to the government paying for nursing home care once assets are depleted. By giving money to such a trust it is out of the ownership of the elderly person. Government then will not count it in determining whether the person is poor enough to qualify for assistance. There is a 5 year lookback period on this. Money given to the trust up to 5 years before is counted as belonging to the couple/person.

Thus, it is a way to protect the assets from depletion paying for long term care. From what you describe, it may be too late.

In any case, there is nothing you can do about it.

** If I may, for future reference, is there anything that can be done to prevent this when setting up an irrevocable trust? Or is this a standard for these?

[StarTrekDoc]

IRM what afan said - probably the lookback function for determination of assets and medical for Nursing home.

To your follow up -- prevent what ? the lookback? If that-- nope. They set this up so folk cannot bypass the means testing on assets.

It's a huge gap in our medicare system: Assisted care and nursing home care --unless we're willing to pay higher taxes to fund, it's not going to be addressed.

[jfoxcpacfp]

Intentionally moving assets to prevent them from being counted toward Medicaid eligibility is technically illegal but attorneys still do it because it is never prosecuted. I hate to hear that they did this and, especially, feel bad for your FIL's deteriorating health. If they apply for Medicaid in the next 5 yrs, the assets in the trust can be used to pay nursing home costs. Obviously, there is a lot to this story that you are not privy to, especially the backstory that led to them setting up this trust.