Protect Your Home From Nursing Home Costs — and Keep Living in It

Long-term care can consume a lifetime of savings, and in Michigan, Medicaid generally won't help pay until most of your assets are gone. An irrevocable pure grantor trust, often called an iPug® trust, is a Medicaid planning tool designed to protect your home and savings from nursing home costs while you keep living in your home. At CF Legal, we help individuals and families across Genesee County decide whether it fits their situation, and build one that holds up.

What Is an Irrevocable Pure Grantor Trust, and Who Is It For?

An irrevocable pure grantor trust is a trust you create and fund with assets such as your home and savings. "Irrevocable" means you can't simply take the assets back. "Pure grantor" means that for income tax purposes, you are treated as the owner of the trust property, so trust income is reported on your own tax return. A trustee you choose holds the property, you keep the right to live in your home, and the principal stays out of your reach. Because you can't access it, Medicaid generally doesn't count it once the look-back period has passed.

It tends to fit homeowners who are healthy enough that long-term care isn't an immediate concern, who want to protect their home for their family, and who are comfortable with the principal no longer being theirs to spend.

The Two Rules That Shape Every iPug® Plan

Two features decide whether an iPug® trust works: who can reach the principal, and when the trust is funded.

The Principal Stays Out of Your Reach

You name a trustee, often an adult child, who holds title and manages the property under the trust's terms. The trustee cannot pay principal to you or for your benefit, which is what keeps it from being counted for Medicaid. Depending on how the trust is drafted, you may keep limited rights, such as living in the home, receiving income, and replacing the trustee.

The 60-Month Look-Back

When you apply for Medicaid long-term care benefits, Michigan reviews transfers made in the 60 months before applying. Funding the trust starts that clock. If you need Medicaid within five years, a penalty period can delay your eligibility. After five years, the transfer is generally outside the look-back, which is why timing matters more than any other feature of the plan.

What a Complete iPug® Trust Plan Includes

Your Home

Your home is usually the largest asset in the plan. The trust is typically drafted so you keep the right to live there for as long as you choose. Before the deed is transferred, we review how the transfer affects your property taxes, homeowner's insurance, and tax treatment on a later sale, so there are no surprises.

Savings and Investments

Bank and brokerage accounts can be retitled into the trust, with the trustee managing them and the income paid to you under the trust's terms. We help you decide how much to place in the trust and how much to keep outside it for everyday needs and emergencies.

Income Tax and Capital Gains

Because the trust is a grantor trust, you continue to report its income, and it is generally designed to preserve the tax treatment you'd have if you still owned the home, including the home sale exclusion. Depending on how the trust is drafted, its assets may also receive a stepped-up basis at your death, which can reduce capital gains tax for your heirs.

Funding the Trust Correctly

A signed trust protects nothing until assets are actually retitled into it. We prepare and record the deed, update account ownership, and confirm each transfer is complete. An unfunded trust is one of the most common and costly mistakes in Medicaid planning, and it's one we help you avoid.

Choosing a Trustee

The trustee manages the trust property and must follow its terms, so the choice matters. Many families name an adult child, with a backup in case that person can't serve. We help you weigh who is dependable, organized, and willing to take on the responsibility, and we explain the trustee's duties before anyone signs.

Your Will and Other Documents

An iPug® trust doesn't replace a will, a revocable trust, a power of attorney, or a patient advocate designation. A revocable trust gives you control but is generally counted for Medicaid, while an iPug® trades some control for protection. Most families still need a will to handle anything left outside the trust, and we draft everything to work as one plan.

Why Families in Genesee County Work With CF Legal

CF Legal has served families in Flint, Grand Blanc, Davison, Fenton, and the surrounding communities for over 30 years. Craig Fiederlein has handled estate planning, elder law, Medicaid planning, and probate matters across Genesee County throughout his career, so he drafts with the whole picture in mind: what the trust must accomplish, how it will be funded, and what your family will face if something goes wrong. We're a multi-attorney firm with offices in Flint and Grand Blanc. Our phones are answered directly, and we return calls within 24 hours.

Estate Planning Workshops in Grand Blanc

If you'd like to learn more before scheduling a one-on-one consultation, CF Legal hosts monthly estate planning workshops at the Grand Blanc Elks Club. These sessions cover wills, trusts, Medicaid planning, and what happens when someone dies without a plan in place, in plain language and without pressure. Seating is limited.

Frequently Asked Questions About iPug® Trusts in Michigan