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My girlfriend's parents are 60 and are now starting to think about long term care and estate planning.

They're not wealthy; they have a $200K house and maybe $50,000 in IRAs. While the laws are ever changing, we're not worried about inheritance taxes at this point. The issues are:

Qualifying for Medicaid someday- Should they give the house to their kids now, or put it in an irrevocable trust so they'll have the option of subsidized nursing home care in 20 years or so? The family is close and responsible, so letting the kids take ownership isn't an issue. But it does put the asset at risk if a child gets into financial trouble. I wonder what the chances are they'll even end up in a nursing home? My grandparents all lived in their houses till only a few days before they died. And I'd hate to see my parents in such an unpleasant place.

Estate Planning- Is a will enough, or is a living trust necessary? There are costs to probate, which the trust avoids, but then there are costs to the trust as well. Maybe the living trust is the answer to the Medicaid issue as well.

Any advice is welcome. Thanks.

Nick
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