There are two types of trusts that a grantor (person) can create; revocable and irrevocable trusts. A revocable trust can be freely altered, changed, and revoked by the grantor. Irrevocable trusts are trusts with specific terms that cannot be changed or terminated by the grantor. By the grantor transferring their assets into this type of trust, they are effectively removing their incidents of ownership over the property.
Irrevocable trust can be used as a vehicle in Medicaid planning and can also be effective in reducing a person’s estate for estate tax purposes.