[Porsche-O-Phile]

Correct (although my understanding is that it's state-by-state). My parents needed an IRRevocable trust for exactly this reason - the assets are under the full control of the Trustees and cannot be transferred back to them (although they can appoint, fire, replace or add Trustees as they see fit). For this reason it's very helpful and the assets are seen as being sufficiently out of their control so they don't come into play for purposes of Medicaid eligibility. I'm a Trustee, my brother is another one. We obviously will allow them full lifetime and unrestricted use of their property (especially their Real Estate via a "life estate" agreement). When they pass on, we can dispose of their assets as they wanted without the involvement of probate (some goes to us, some to their grandchildren, some to charity, etc.)

Neither of them wants nursing home care but the reality is that at some point one or both of them might need it since that's the only realistic way for them to obtain continuous care. Knowing this, would one really want to be exposed and force one's heirs (children, usually) into choosing between seeing "their" inheritances seized by a nursing home or their parents receiving lesser-quality care to stretch things out? These are very real situations and crummy decisions that people are forced into every day by our system. Setting up trusts very nicely sidesteps a lot of this and a lot of the potential battles between siblings that can result in estranged relationships and worse (again, these sorts of things happen every day...) All these considerations and more were explained by the lawyer. Money well-spent and very enlightening / informative.

As I said above, the government is NOT your friend here and neither is the system they've cooked up to benefit those with deep pockets and strong lobbying groups.