Tip – Putting your home into a revocable trust does not protect it from Medicaid estate recovery.
A common misconception in Medicaid planning is that placing a home or other real property into a revocable living trust will shield it from Medicaid estate recovery. In Idaho, this is not the case. These trusts do not provide the protection many people expect, and they can actually complicate the Medicaid application process.
Trusts and Medicaid Estate Recovery
Idaho participates in the Federal Medicaid Estate Recovery Program, which requires the state to seek reimbursement from a deceased Medicaid recipient’s estate for long-term care costs paid on their behalf. Under Idaho law, the definition of “estate” for recovery purposes is broad and extends beyond probate assets. Property held in a revocable living trust remains subject to estate recovery because the Medicaid recipient retained control over the trust during their lifetime.
A Home in a Trust Is a Countable Asset
Beyond the estate recovery issue, placing a home in a revocable living trust can create a significant problem during the Medicaid eligibility determination. In Idaho, primary residence is generally considered an exempt (non-countable) asset for Medicaid purposes when the applicant lives in the home or intends to return to it. However, once a home is transferred into a revocable living trust, Idaho Medicaid may treat it as a countable asset, potentially disqualifying the applicant from receiving benefits until the asset is spent down. This is the opposite of what most clients intend when they create a trust.
Recommendation
In Idaho, a revocable living trust is rarely the appropriate tool for Medicaid asset protection, and doing so can result in delayed benefits, unexpected asset spend- downs, and estate recovery exposure. Other planning strategies may be more effective and should be evaluated on an individual basis.
Tom Packer is an Elder Law Attorney serving all Southeast Idaho. As part of his law practice, Tom offers Life Care Planning to deal with the challenges created by long-term illness, disability and incapacity. If you have a question about a Senior’s legal, financial or healthcare needs, please call us.
February 2026