Can an iPUG Trust Help Me Qualify for Medicaid Without Losing My Lifetime Savings?

Medicaid eligibility is a critical concern for many middle-income families in Brooklyn and throughout New York City. With the rising costs of long-term care and nursing homes, it’s no wonder families fear losing the lifetime savings they've worked so hard to build. One potential solution that’s gaining attention is the iPUG Trust—a modern approach to asset protection. But can an iPUG Trust really help you qualify for Medicaid without sacrificing your financial legacy?

At Alatsas Law Firm, we understand your concerns about asset protection, Medicaid, and the risk of probate. This article breaks down whether an iPUG Trust is the right solution for you and how it compares with other asset protection tools.

1. What Is an iPUG Trust?

An iPUG Trust, or “Irrevocable Pure Grantor Trust,” is a modern legal tool designed to help individuals protect their assets from long-term care costs without completely giving up control. Developed as an alternative to traditional irrevocable trusts, iPUG Trusts are “Medicaid-friendly,” meaning they can shield your home and savings from being counted as available resources when applying for Medicaid.

Key features of an iPUG Trust:

• You don’t need to relinquish all control over your assets.

• Assets transferred are generally not subject to Medicaid recovery after your death.

• Designed to protect not only cash and investments, but also your primary residence.

2. How Medicaid Treats Your Assets

Medicaid is a lifeline for many families contending with long-term care costs. However, eligibility comes with strict income and asset limits. In New York for 2025, applicants generally cannot have more than $30,182 in countable assets (for a single individual). Exceeding this limit means you must spend down your savings before qualifying.

Common Assets Medicaid Considers “Countable”:

• Bank accounts, stocks, bonds, CDs

• Vacation properties and other real estate (excluding your principal residence in some cases)

• Cash value of certain life insurance policies

Key Challenge: Keeping your family’s savings out of this “countable” column while still providing for your needs.

3. Can an iPUG Trust Protect My Assets for Medicaid?

Yes, but with some important caveats. The iPUG Trust is specifically designed so that assets you place in it are not counted as your own for Medicaid eligibility purposes.

How Does It Work?

• Irrevocability: Once established, you cannot unilaterally dissolve the trust or reclaim the assets directly. This satisfies Medicaid’s requirement that assets placed in an irrevocable trust are not immediately yours.

• Grantor Control: You retain the right to select or remove trustees and decide how assets are distributed after your passing, giving you greater control than many other irrevocable trusts.

• Income: You can receive income generated by the trust, but principal generally cannot be accessed directly, preserving Medicaid eligibility.

• Look-Back Period: Medicaid has a five-year “look-back” window. Any assets gifted or transferred to the iPUG Trust within five years of applying for Medicaid could disqualify you temporarily.

Bottom Line: When structured correctly and timed appropriately, an iPUG Trust can protect your assets from Medicaid spend-down requirements.

4. iPUG Trust vs. Traditional Irrevocable Medicaid Trust

Comparative Analysis

Takeaway: The iPUG Trust offers a unique blend of control and protection, which is appealing for families who want security but aren't ready to completely relinquish assets.

5. Common Misconceptions and Limitations

While iPUG Trusts provide strong benefits, it's important to address potential drawbacks and misunderstandings:

• Not an Immediate Shield: Transfers made less than five years before a Medicaid application may result in a penalty period.

• Irrevocable Means Commitment: While you have management rights, you can’t take the assets back.

• Income Access Limitations: You generally cannot access the principal; only trust income can be distributed to you.

• State Law Variability: New York recognizes the iPUG format, but local nuances matter—professional guidance is essential.

At Alatsas Law Firm, we help clients weigh these limitations with their family’s unique needs and circumstances.

6. Real-World Examples and Success Stories

Case Study 1: Protecting the Brooklyn Brownstone

A middle-income couple in Bay Ridge feared losing their brownstone to nursing home costs. By setting up an iPUG Trust and transferring ownership five years ahead of expected Medicaid needs, they protected their home, maintained control over their estate, and were able to pass the property to their children without Medicaid claims.

Case Study 2: Safeguarding Savings While Qualifying for Medicaid

A retired teacher with savings above Medicaid’s asset limit used an iPUG Trust to transfer non-home assets. After the five-year look-back, she qualified for Medicaid while keeping her legacy intact for her family.

7. The iPUG Trust Process: Step by Step

1. Personal Consultation

Sit down with a qualified attorney (like those at Alatsas Law Firm) to assess your assets, Medicaid needs, and goals.

2. Trust Design and Customization

Draft a tailored iPUG Trust that reflects your wishes for beneficiaries, control provisions, and asset protection.

3. Asset Transfer

Move selected assets—such as your family home, savings accounts, or investments—into the trust.

4. The Waiting Period

Plan around Medicaid’s five-year look-back to avoid penalties.

5. Ongoing Management

You (or your chosen trustee) manage trust assets, receiving income as applicable, while realizing peace of mind regarding asset protection.

8. FAQs About iPUG Trusts and Medicaid Eligibility

Q: Can I live in my home if it’s in an iPUG Trust?
A: Yes. You retain the right to live in your home for your lifetime, even after transferring it to the trust.

Q: Can I change my beneficiaries after setting up the trust?
A: Yes, if the trust is drafted with a Limited Power of Appointment, common in iPUGs.

Q: What if I need to access money in the trust?
A: Typically, only income generated by the trust can be distributed to you, not the principal.

Q: How much does it cost to set up an iPUG Trust?
A: Costs vary based on complexity, but Alatsas Law Firm offers transparent pricing and a free initial consultation.

Q: Is an iPUG Trust right for everyone?
A: No. Each family’s financial, health, and estate situation is unique. Professional guidance is essential to ensure the right fit.

9. Why Middle-Income Brooklyn Families Trust Alatsas Law Firm

Families throughout Brooklyn, Queens, and Staten Island choose Alatsas Law Firm for our:

• Nearly 30 years of local experience

• Personalized solutions—no boilerplate documents

• Culturally sensitive advice for multi-generational families

• Unmatched guidance through the Medicaid planning process

We frequently host workshops and provide complimentary guides to empower families with the knowledge they need to act confidently.

10. Conclusion: The Peace of Mind You Deserve

An iPUG Trust can be a powerful way to qualify for Medicaid without losing your lifetime savings—but its success hinges on careful design, advance planning, and professional oversight. For Brooklyn’s middle-income families, it represents not just asset protection, but genuine security for the next generation.

Ready to protect your home, savings, and family legacy? Contact Alatsas Law Firm for a personalized consultation and start your planning journey with peace of mind. 

For more resources or to schedule your consultation, visit Alatsas Law Firm.