You cannot directly receive principal, however, because, if you could, it would be subject to the nursing home. In order to obtain principal from the trust, you, as trustee, make a gift of principal to the beneficiaries, usually your children. Your children then make a gift of the funds back to you. Some people use the irrevocable trust to shelter their real estate only, while others use it to shelter their real estate and some, or all, of their investments. There is a waiting period for the trust to become effective to shelter assets, the duration of which depends on the value of the assets in the trust.
Many people mistakenly believe that the waiting period is five years.
The is incorrect . In most cases, the waiting period is far less than five years. An investment portfolio of similar size can be sheltered in the same amount of time. Deed with Special Power of Appointment As an alternative to the Medicaid Trust, the deed with Special Power of Appointment is a method of sheltering your real estate. A deed of the property is made to your children.