Using an Irrevocable Trust to Protect Gold, Silver, or Other Physical Assets from Medicaid Eligibility Rules

When planning for long-term care and Medicaid eligibility, many individuals seek to protect their physical assets-such as gold, silver, or other valuables-from being counted toward Medicaid's asset limits. An irrevocable trust is a legal tool that can help shield these assets while ensuring Medicaid eligibility when needed. However, Medicaid rules are strict, and improper structuring can lead to disqualification.

If you own precious metals or other tangible assets and want to protect them from Medicaid's spend-down requirements, strategic estate planning is essential. Contact us by either using the online form or calling us directly at 414-253-8500 for legal assistance.

How Medicaid Treats Gold, Silver, and Other Physical Assets

Medicaid has strict financial eligibility requirements, including income and asset limits. Assets that Medicaid considers "countable" must be spent down before eligibility is granted. These generally include:

Cash and bank accounts
Stocks and bonds
Real estate (other than a primary residence)
Precious metals and collectibles

For individuals who own gold, silver, or other valuable tangible assets, these are often classified as countable resources under Medicaid rules. This means that an applicant must liquidate these assets and use the proceeds toward medical or long-term care expenses before Medicaid coverage kicks in.

Exempt vs. Non-Exempt Assets

Not all assets are considered countable under Medicaid. Some exemptions include:

A primary residence (within equity limits)
One vehicle
Personal belongings and household items
Prepaid funeral and burial plans

Gold, silver, and other physical assets do not fall under typical exemptions unless properly structured within an irrevocable trust.

How an Irrevocable Trust Protects Precious Metals and Physical Assets

An irrevocable trust allows an individual to transfer ownership of assets to the trust, removing them from their personal estate. Because the trust is independent and cannot be altered or revoked (except under specific circumstances), Medicaid does not consider the trust assets as part of the applicant's resources.

Key Benefits of Using an Irrevocable Trust

Protects assets from Medicaid spend-down requirements
Ensures assets pass to heirs rather than being used for long-term care costs
Preserves eligibility for Medicaid benefits
Shields assets from creditors and legal claims

However, Medicaid rules require that assets must be placed in the trust at least five years before applying for benefits. This is known as the Medicaid look-back period. If assets are transferred within this period, they may still be counted, potentially delaying eligibility.

Funding an Irrevocable Trust with Gold, Silver, and Physical Assets

When transferring physical assets like gold and silver into an irrevocable trust, several factors must be considered:

Proper Valuation - The assets must be appraised and documented to establish their fair market value at the time of transfer.
Legal Transfer of Ownership - Physical assets must be formally assigned to the trust, ensuring Medicaid does not consider them as personal resources.
Storage and Management - The trust must specify how and where these assets will be stored, whether in a secure vault, safe deposit box, or trustee-controlled facility.

Key Differences Between Revocable and Irrevocable Trusts for Medicaid Planning

Feature	Revocable Trust	Irrevocable Trust
Can Be Changed or Canceled?	✅ Yes	❌ No
Protection from Medicaid?	❌ No	✅ Yes (if created outside the 5-year look-back period)
Assets Still Considered Yours?	✅ Yes	❌ No
Creditor and Lawsuit Protection?	❌ No	✅ Yes
Who Controls the Assets?	Grantor (You)	Independent Trustee
When Are Assets Distributed?	During lifetime or at death	Typically at death or as per trust terms

Structuring an Irrevocable Trust for Physical Assets

To successfully use an irrevocable trust to protect gold, silver, and other physical assets from Medicaid eligibility rules, it is essential to structure the trust correctly. A poorly structured trust could result in Medicaid treating the assets as countable, potentially disqualifying the applicant.

Key Elements of an Irrevocable Trust for Precious Metals

Selection of a Trustee
- The trust must have an independent trustee who manages and controls the assets.
- The original owner cannot serve as the trustee, as this would give them direct control and risk Medicaid disqualification.
- The trustee can be a trusted individual or a professional fiduciary.
Clear Asset Transfer Documentation
- A legal bill of sale or an assignment of ownership document should be created when transferring gold, silver, or other assets into the trust.
- Documentation should clearly describe the assets, including weight, purity, and current market value.
Storage and Access Restrictions
- The trust must outline where the physical assets will be stored. Options include:
  - A secure depository or vault in the trust's name
  - A safe deposit box controlled by the trustee
  - A secure private location, with clear restrictions on access
- The Medicaid applicant should not have direct access to the assets, as this could lead to disqualification.
Trust Distribution Terms
- The trust should specify how and when the assets will be distributed to beneficiaries, such as children or heirs.
- Typically, assets remain in the trust until the grantor passes away, at which point they are transferred to heirs outside of Medicaid's reach.

The Medicaid Look-Back Period and Penalties

One of the most important considerations when using an irrevocable trust is the Medicaid five-year look-back period. Medicaid reviews all asset transfers made within the five years before applying for benefits. If assets-including gold, silver, or collectibles-are transferred into a trust within this window, Medicaid may impose a penalty period, delaying eligibility.

To avoid penalties:

Plan early - Transfer assets to an irrevocable trust well before needing Medicaid benefits.
Work with an experienced attorney - A legal professional can ensure the trust meets all Medicaid compliance requirements.

Alternatives to an Irrevocable Trust for Asset Protection

While an irrevocable trust is a highly effective method for protecting gold, silver, and other physical assets from Medicaid spend-down requirements, it is not the only option. Depending on individual circumstances, other asset protection strategies may be considered.

Gifting Assets to Family Members

Directly gifting gold or silver to heirs may remove them from Medicaid calculations, but Medicaid's look-back period still applies.
The recipient becomes the legal owner, which can expose assets to creditors, divorce settlements, or personal financial issues.

Converting Assets into Exempt Resources

In some cases, converting non-exempt assets (gold, silver, cash) into exempt resources-such as a primary residence or prepaid funeral expenses-can be an alternative to trust planning.

Medicaid-Compliant Annuities

Certain annuities can help convert countable assets into income streams that comply with Medicaid rules, but these must be carefully structured.

Protecting Your Assets with Legal Guidance

Properly structuring an irrevocable trust to protect gold, silver, and other physical assets from Medicaid eligibility rules requires detailed legal planning. Mistakes in trust creation, asset transfer, or storage arrangements could lead to Medicaid penalties or ineligibility.

At Heritage Law Office, we help individuals create legal strategies to protect their wealth while ensuring Medicaid compliance. If you own gold, silver, or other valuable physical assets and want to explore trust-based planning, contact us today.

📞 Call us at 414-253-8500 or use our online contact form to schedule a consultation.=

Frequently Asked Questions (FAQs)

1. Can I use an irrevocable trust to protect gold and silver from Medicaid?

Yes, an irrevocable trust can protect gold, silver, and other physical assets from Medicaid's spend-down requirements. Once transferred into the trust, the assets are no longer counted as part of your estate, provided the transfer happens outside the five-year Medicaid look-back period. However, the trust must be properly structured, and you cannot have direct control over the assets.

2. How does Medicaid determine if gold or silver is a countable asset?

Medicaid considers gold, silver, and other valuable physical assets as countable resources, similar to cash, stocks, and real estate. Unless these assets are placed into an irrevocable trust or converted into an exempt resource, they must be spent down before Medicaid eligibility is granted.

3. What happens if I transfer gold or silver into an irrevocable trust within five years of applying for Medicaid?

If you transfer assets into an irrevocable trust within the five-year Medicaid look-back period, Medicaid may impose a penalty period, delaying your eligibility for benefits. The length of the penalty depends on the value of the transferred assets and the cost of care in your state.

4. Where should I store gold and silver held in an irrevocable trust?

Gold and silver in an irrevocable trust should be stored in a secure location specified by the trust. Options include:

A bank safe deposit box
A secure vault or depository
A trustee-controlled facilityThe grantor (Medicaid applicant) should not have direct access to the assets to ensure Medicaid compliance.

5. Can an irrevocable trust protect other physical assets besides gold and silver?

Yes, an irrevocable trust can protect a wide range of physical assets, including art, collectibles, jewelry, antiques, and real estate. The key requirement is that ownership of the assets must be legally transferred to the trust, and the grantor must not retain direct control.