Revocable Trusts vs. Irrevocable Trusts

HNWElder Law, Understanding When a Trust Should Be Used in NJ

Knowing the basic difference between trusts can make all the difference in paying for your long-term healthcare. In New Jersey, only irrevocable trusts can protect your assets from the cost of long-term care, meaning that if your trust is revocable, it may prevent you from qualifying from certain government assistance programs such as Medicaid and Medicare.

A revocable trust is one that may be amended or terminated by its creator throughout their life. An irrevocable trust is therefore one that cannot be amended by the person who creates it. Today, all trusts in New Jersey are presumed to be revocable. It is therefore important that you explicitly state that your trust is irrevocable, as Courts may find it to be revocable if it doesn’t say differently, even if that was not your intention and even if you have not touched the trust. An irrevocable trust essentially makes money and assets no longer touchable, meaning that Medicaid will no longer consider those assets in determining your ability to pay your long-term healthcare bills.

Many people today choose to set up health, education, maintenance, and support standard (HEMS) trusts. While these may be advantageous for tax purposes, they tend to make the trust available to pay for healthcare. Therefore, if you are creating your trust to protect your assets from the cost of long-term health care, you should NOT use an HEMS trust.

If you have any questions regarding a revocable or irrevocable trust or how to protect your assets from the cost of long-term healthcare, please contact Fredrick P. Niemann, Esq. today. He can be reached at 855-376-5291 or by email at He looks forward to hearing from you.  For further information, go to to learn more.

By Fredrick P. Niemann, Esq., a New Jersey Trust Attorney

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