As estate planning attorneys serving clients in Gloucester, Rockport, Manchester by the Sea, Beverly, and throughout the North Shore, we work with many families who want to preserve their hard-earned assets for future generations. For Massachusetts residents concerned about long-term care expenses, estate taxes, or shielding assets from creditors, an irrevocable trust is one of the most effective legal tools available.

Creating an irrevocable trust is a major decision. Unlike a revocable trust, once an irrevocable trust is funded and executed, you generally cannot change it or take assets back. But with that permanence comes real protection. If properly structured and managed, an irrevocable trust can remove assets from your taxable estate, protect your home and savings from being lost to nursing home care, and prevent lawsuits or creditors from reaching certain property.

Under Massachusetts law, irrevocable trusts must meet specific legal requirements to provide the intended protections. When set up correctly, this type of trust can give you peace of mind knowing that your family’s financial future is secure.

Long-Term Care Planning And The Five-Year Look-Back

One of the most common reasons we help clients create irrevocable trusts is to plan for future long-term care. Massachusetts residents who may need MassHealth (Medicaid) benefits to pay for nursing home care must meet strict financial eligibility limits. If you own too many assets, including your home, you may be required to spend down your estate before qualifying.

By placing your home or other assets into an irrevocable trust, those assets can be protected—so long as the transfer is done early enough. MassHealth applies a five-year look-back period to any transfers made into a trust. That means assets placed in the trust at least five years before applying for long-term care coverage will generally not be counted against you. This rule is outlined under the Code of Massachusetts Regulations, 130 CMR 520.019, which governs trust treatment for MassHealth eligibility.

It’s important to understand that if you retain too much control over the trust or use assets in ways that violate MassHealth rules, the protection can be lost. That’s why careful drafting is critical.

Protecting Your Family Home From Estate Recovery

Even if you qualify for MassHealth and receive long-term care benefits, the Commonwealth of Massachusetts has the right to pursue “estate recovery” after your death. This means MassHealth may file a claim against your estate to recover what it spent on your care. That claim often targets your home, leaving your family at risk of losing it.

If your home is placed into an irrevocable trust—assuming it’s properly structured and the five-year look-back period has passed—it can be excluded from your probate estate. That makes it inaccessible to MassHealth estate recovery. Under M.G.L. c. 118E, § 31, the state is limited to recovering assets that are part of the probate estate, not assets inside a properly created irrevocable trust.

Asset Protection Against Creditors And Lawsuits

An irrevocable trust can also help protect assets from creditors or lawsuits. Once assets are transferred into the trust, they are no longer legally owned by you. If you are sued or face personal liabilities, trust property is generally off-limits—so long as the trust was not created to defraud creditors.

This type of protection is especially useful for individuals in professions or businesses with liability exposure, or for anyone seeking to ensure their children or spouse receive protected inheritances.

Tax Benefits And Estate Reduction

Massachusetts currently imposes an estate tax on estates over $2 million (as of 2024). An irrevocable trust can be used to remove life insurance policies, appreciating investments, or real estate from your taxable estate. By moving these assets into an irrevocable trust, they can grow outside of your estate and reduce the overall tax burden on your heirs.

Certain irrevocable trusts, such as Irrevocable Life Insurance Trusts (ILITs), are designed specifically for this purpose. Massachusetts follows federal tax principles when evaluating whether trust assets should be included in your estate, so proper legal guidance is key to avoiding unintended consequences.

Why This Type Of Trust Requires Careful Planning

While irrevocable trusts offer powerful protections, they are not one-size-fits-all. You give up ownership and access to the assets you place in the trust. If you need those funds later, you may be unable to use them. That’s why we always begin with a clear understanding of your financial picture, your health, your goals, and your family’s needs.

We create each trust carefully under M.G.L. c. 203E (Massachusetts Uniform Trust Code) and ensure all terms comply with state and federal law. Every trust we draft is tailored to fit our client’s specific estate plan.

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Irrevocable Trust Frequently Asked Questions

What Is An Irrevocable Trust And How Is It Different From A Revocable Trust?
An irrevocable trust cannot be changed or revoked once it is signed and funded. Unlike a revocable trust, where you maintain control, an irrevocable trust removes assets from your ownership, offering stronger protection from creditors, taxes, and MassHealth.

Can I Still Live In My Home If It’s In An Irrevocable Trust?
Yes, if the trust is drafted to allow it, you can retain the right to live in your home for the rest of your life. However, you cannot retain full ownership or control. This arrangement must be clearly stated in the trust document.

When Should I Create An Irrevocable Trust In Massachusetts?
If you’re concerned about long-term care costs, estate taxes, or asset protection, you should consider setting up the trust at least five years before you may need MassHealth benefits to avoid penalties related to the look-back period.

Are Assets In An Irrevocable Trust Still Subject To Probate?
No. Assets in an irrevocable trust are not part of your probate estate. They pass directly to your beneficiaries under the terms of the trust, which helps avoid the probate process and protects privacy.

Can I Name My Children As Beneficiaries Of My Irrevocable Trust?
Yes, you can name your children, grandchildren, spouse, or other individuals as beneficiaries. The trust terms control how and when distributions are made to them, which can be structured for asset protection and tax efficiency.

Will I Still Pay Taxes On Income Earned By The Trust?
That depends on the type of irrevocable trust. Some trusts are structured as grantor trusts, where the income is taxed to you, while others are taxed as separate entities. We help clients choose the most beneficial tax structure.

Can I Serve As Trustee Of My Own Irrevocable Trust?
In most cases, no. To maintain the protections, you typically must appoint someone else—such as a child, sibling, or trusted advisor—as trustee. You can retain some influence, but not control over distributions or trust assets.

What Happens If I Need Money From The Trust Later?
You generally cannot access funds once they are placed in an irrevocable trust. That’s why it’s important to carefully evaluate your future needs and only place surplus assets into the trust.

Can An Irrevocable Trust Protect Against Nursing Home Costs?
Yes, when structured properly and funded at least five years before applying for MassHealth, the assets in the trust are not counted toward eligibility. This is one of the main benefits of this planning tool in Massachusetts.

Do I Still Need A Will If I Have An Irrevocable Trust?
Yes. A will can direct any remaining assets that were not placed in the trust into the trust at your death (via a pour-over will) and can also appoint guardians for minor children. Both documents should work together.

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Call The Sullivan Firm P.C. For a Free Consultation

At The Sullivan Firm P.C., we help families throughout Gloucester, Rockport, Manchester by the Sea, Beverly, and across the North Shore understand when an irrevocable trust makes sense—and how to use it properly. If you’re looking to protect your home, savings, and loved ones from long-term care costs or estate taxes, let us show you how strategic planning can preserve what you’ve worked so hard to build.

Call The Sullivan Firm P.C. Today At 978-325-2721 For A Free Consultation. Our office is located in Gloucester, Massachusetts, and we serve clients across Essex County. Let’s work together to protect your legacy with confidence and care.