The funds in the trust itself likely cannot be garnished, but the funds you ultimately receive from the trust may be exposed to savvy creditors. While creditors typically garnish income directly from an employer on your paycheck, they can also seek funds from other sources, such as money sitting in bank accounts.

Irrevocable trusts safeguard assets from creditors. Creditors can’t claim assets in an irrevocable trust. The reason being that you don’t control the assets, can’t revoke the Trust, and therefore can’t be considered the owner of the assets.

The trustee of an irrevocable trust can only withdraw money to use for the benefit of the trust according to terms set by the grantor, like disbursing income to beneficiaries or paying maintenance costs, and never for personal use.

An irrevocable trust is one that may not be modified once it has been created, so it cannot be revoked, amended, changed or altered in any way. Money, property and holdings placed into irrevocable trusts cannot be removed at a later date, so it is important the owner is aware that this is a permanent action.

A trust can remain open for up to 21 years after the death of anyone living at the time the trust is created, but most trusts end when the trustor dies and the assets are distributed immediately.

Inheritance Advantages Putting your house in an irrevocable trust removes it from your estate, reveals NOLO. Unlike placing assets in an revocable trust, your house is safe from creditors and from estate tax. If you use an irrevocable bypass trust, it does the same for your spouse.

You cannot control the trust’s principal, although you may use the assets in the trust during your lifetime. If the family home is an asset in the irrevocable trust and is sold while the Medicaid recipient is alive and in a nursing home, the proceeds will not count as a resource toward Medicaid eligibility.

When you apply for Medicaid, any gifts or transfers of assets made within five years (60 months) of the date of application are subject to penalties. Any gifts or transfers of assets made greater than 5 years of the date of application are not subject to penalties. Hence the five-year look back period.

There are several things you can to do protect your elderly parents from the siblings taking advantage of them.

1. Have a family meeting.
2. You may have to see an elder care attorney and appoint someone to be the legal power of attorney to protect the assets if siblings can’t come to an agreement.

For a simple irrevocable trust, you could expect to pay $900 on the low end for legal fees. For more complicated trusts, you can expect to pay as much as $3,500 to an estate planning attorney.

There is no legal limit on the amount of money a person can give away. A person can give away a million dollars if she wants. There may be tax and Medicaid consequences, but there is no law that limits how much money a person can give away.

10 tips to protect your aging parents’ assets

1. Talk to your loved one often and as soon as possible about their wishes for the future and your desire to help.
2. Block scammers from calling.
3. Sign your parents up for free credit reports.
4. Help set up automatic payments.