Our estate planning attorneys often meet families who want to protect the assets they’ve worked a lifetime to build. Whether it’s a home, investments, life insurance, or other wealth, protecting those assets from lawsuits, long-term care costs, and probate is one of the smartest legal decisions we can make. One of the most effective tools available in Michigan for this purpose is the irrevocable trust. This legal instrument provides strong asset protection by transferring ownership of certain assets into a trust that cannot be easily changed or revoked.

When we create an irrevocable trust, we make a long-term commitment. The assets are no longer ours personally. These estate planning tools also help shield these assets from creditors and government recovery efforts related to long-term care. That said, this kind of trust must be structured properly to comply with Michigan laws and Medicaid regulations. It’s not a one-size-fits-all solution, but for the right families, it can offer significant peace of mind. Let’s walk through how these trusts work, how Michigan law treats them, and what we need to know before using one.

Understanding Irrevocable Trusts Under Michigan Law

An irrevocable trust is a trust that, once created and funded, cannot be altered or revoked by the person who created it. Under Michigan Compiled Laws § 700.7602, a trust becomes irrevocable either by its terms or after the grantor’s death unless the trust states otherwise. The grantor—the person creating the trust—relinquishes ownership and control over the assets placed into the trust. These assets are then managed by a trustee for the benefit of the named beneficiaries.

The key benefit is that since the assets are no longer owned by the grantor, they’re typically protected from legal judgments and Medicaid estate recovery. That’s why irrevocable trusts are commonly used in Medicaid planning—to preserve wealth for a spouse or children while still qualifying for long-term care benefits.

Medicaid Asset Protection And The Five-Year Lookback

In Michigan, Medicaid eligibility for long-term care has strict asset limits. To prevent people from transferring their assets at the last minute, the state enforces a five-year lookback period. This means that any transfer of assets into an irrevocable trust must be made at least five years prior to applying for Medicaid to avoid penalties. Timing is critical. If we wait too long, the trust won’t protect the assets when we need it most.

That’s why families often use a Medicaid Asset Protection Trust (MAPT). This type of irrevocable trust is carefully drafted to comply with Medicaid rules, ensuring the assets within are exempt from countable resources, provided the five-year requirement is met.

Other Common Types Of Irrevocable Trusts

In addition to MAPTs, we often use other irrevocable trusts depending on our goals:

• Irrevocable Life Insurance Trusts (ILITs) allow us to move large life insurance policies out of the taxable estate and provide liquidity for estate taxes or debts.
• Spousal Lifetime Access Trusts (SLATs) allow one spouse to benefit indirectly while still providing asset protection from lawsuits or divorce.
• Grantor Retained Annuity Trusts (GRATs) are often used in tax planning to transfer appreciating assets to heirs with minimal tax impact.

Each of these trust types must be properly structured under Michigan’s Uniform Trust Code, located in MCL § 700.7101 et seq., to be valid and effective.

Probate Avoidance And Control Over Distributions

Another advantage of using irrevocable trusts is avoiding probate. When assets are placed into a trust, they pass directly to beneficiaries upon our death without going through Michigan’s probate process. This can save time, reduce legal fees, and protect our family’s privacy.

Trusts also give you greater control over how and when assets are distributed. Instead of beneficiaries receiving a lump sum, the trust can set terms based on age, need, or specific milestones like college graduation or marriage.

Why Legal Guidance Matters

Because irrevocable trusts involve complex state and federal laws—including tax law, trust law, and Medicaid rules—it’s important that we work with attorneys who can help us make the right choices and ensure our trust is enforceable under Michigan law.

Frequently Asked Questions About Irrevocable Trusts In Michigan

What Makes A Trust Irrevocable In Michigan?

Under MCL § 700.7602, a trust is irrevocable if it states clearly that it cannot be amended or revoked by the grantor or if it becomes irrevocable upon death. Once the trust is signed and assets are transferred in, the grantor generally cannot make changes or take back the property.

Can An Irrevocable Trust Help Protect My Home From Nursing Home Costs?

Yes, if your home is transferred into a properly drafted irrevocable trust and the transfer occurs at least five years before applying for Medicaid. This can help preserve your home for your spouse or children instead of having it taken to repay Medicaid benefits after your passing.

Will My Irrevocable Trust Assets Go Through Probate?

No. Assets held in an irrevocable trust do not go through the Michigan probate court. The trustee will manage and distribute those assets according to your instructions without delay, court supervision, or public record.

Can I Be The Trustee Of My Own Irrevocable Trust?

In most cases, no—especially if the purpose is Medicaid planning or asset protection. If you retain control as trustee, the assets may still be considered yours for legal or Medicaid purposes. It’s usually better to appoint a family member or trusted third party to serve as trustee.

Can My Creditors Take Assets From My Irrevocable Trust?

Generally, no. Once you transfer assets into an irrevocable trust and no longer own or control them, they are typically beyond the reach of your creditors. However, if the transfer was made to avoid paying a known debt, it could be challenged under Michigan’s Fraudulent Transfer Act (MCL § 566.34).

Is An Irrevocable Trust Right For Everyone?

No. Irrevocable trusts are best for individuals who are comfortable giving up control of certain assets in exchange for long-term protection or Medicaid eligibility. If you need regular access to the asset or expect to change your plans frequently, a revocable trust may be a better fit.

Call Boroja, Bernier & Associates To Learn More About Asset Protection Using Irrevocable Trusts

If you’re looking to protect your legacy, your home, or your hard-earned savings from long-term care costs or probate, an irrevocable trust may be a powerful tool. At Boroja, Bernier & Associates, we help families in Troy, and Shelby Township make informed decisions about estate planning under Michigan law.

To schedule your consultation with one of our Michigan estate plan attorneys, simply call us at 586-991-7611. To speak with an estate planning attorney about your goals, call us today at 586-991-7611. We have law offices located in Troy, Michigan, and Shelby Township, Michigan, serving clients throughout Oakland County and Macomb County. Let’s protect what matters most—together.