Just curious, how does an inter-vivo trust work compared to an irrevocable trust?


I am only in the beginning of retirement. I heard of a inter-vivo trust that can be set up to protect a spouse if one needs Medicaid. It has to be set up 5 years before a need for Medicaid. My husband and I chose to not include survivors benefits when we start collecting retirement and social security. How does this trust work compared to an irrevocable trust?



A revocable trust will most likely be counted as an asset of the grantor (the person who set up the trust) because the trust could effectively be cancelled at any time. An irrevocable trust may or may not be counted as an asset of the grantor, depending on how the beneficiary provisions of the trust are written. Any asset transfer to an irrevocable trust would be subject to the five-year look-back rules.

Since it would always be a good idea to use an attorney to set up a trust, make sure you use one who is also familiar with the Medicaid rules.
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Reply to AlfredR

An Inter Vivo Trust is one that is set up while someone is alive, as opposed to a testamentary trust which is set up upon death. A irrevocable trust is one that cannot be changed after it is put in place. It cannot be revoked/cancelled etc.

So an inter vivos trust can be revocable or irrevocable.

No idea on how either would impact Medicaid.
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Reply to Tothill