When a listener named Kim wrote to Suze Orman's "Women & Money" podcast, she shared a common concern: Her family was overwhelmed by estate planning.
Kim explained that her parents were considering setting up both a revocable trust and an irrevocable trust. Their goal? To stay in control of their assets while they're healthy and to potentially shield those assets — like their home and savings — if they ever need to enter a nursing home.
But Kim and her family were confused. Would this strategy actually protect their assets? And what happens if the person managing the trust — known as the trustee — can't do the job anymore?
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Suze's Warning About Irrevocable Trusts
Orman encouraged Kim and her family to slow down and consider the bigger picture: "People first, then money, then things." That's been her mantra for more than two decades.
While an irrevocable trust can, in some cases, protect assets from being counted for Medicaid eligibility, Orman pointed out a major trade-off: "It no longer is part of your estate. It's now out of your hands. Somebody else is in control of it — you are not."
That loss of control can create problems down the line, especially if the trustee dies or becomes incapacitated. "What happens if something happens to the person who has control over it? It can become very, very complicated," Orman said.
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The Risk of Relying on Medicaid
Kim's family was also hoping the irrevocable trust would help cover nursing home care. Orman warned against relying on Medicaid as a solution. In her view, the quality of care for Medicaid patients often isn't comparable to that of private-pay residents.
She pointed out that some nursing homes are already closing due to a lack of funding, and future changes to Medicaid or Medicare could make the situation worse. "To put this money, your parents' money, in front of their care just so you could be OK and have the money, the house can be protected, is not something that I advise," she said.
A Case for Revocable Trusts
While she was critical of irrevocable trusts in this situation, Orman did support the idea of a revocable trust — a legal tool that allows the creators (usually the parents) to stay in full control of their assets. If they become incapacitated, a successor trustee can step in. When they pass away, the assets can go directly to heirs without going through probate.
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Kim's parents were on the right track by also looking into a durable power of attorney and healthcare directive — documents Orman includes in what she calls the "must-have documents" for every estate plan.
Bottom Line
Irrevocable trusts may sound like a great way to protect assets, but they come with significant limitations and long-term consequences — especially if the trustee can no longer serve.
For families like Kim's, Orman's advice is clear: prioritize flexibility and personal care over trying to preserve wealth at all costs. A revocable trust, paired with essential legal documents, can offer both control and peace of mind as loved ones age.
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