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Almost every week, someone sits in our office and and asks a version of the same question: "Can't I just give the house to my kids?" You can. It's cheap, it's fast, and on paper it looks like it solves the problem. It also throws away most of what you were trying to protect! In Washington, it can sometimes leave your family more exposed than if you had done nothing at all. An irrevocable trust costs more up front and asks you to give up real control. This post explains what you get in exchange, and why the Washington rules in particular make the trust the better tool for most families who plan ahead. What an irrevocable trust actually is Many of our clients already have a revocable living trust. You created it, you're the trustee, you can amend it, revoke it, sell the house out of it, and spend every dollar in it. It's a management and probate-avoidance tool, and it's a good tool for a lot of people. An irrevocable trust is a different animal. You generally cannot serve as your own trustee. You cannot amend or revoke it. You cannot reach in and take the principal back. Once the property is transferred, it is no longer yours in any meaningful legal sense. That is not a design flaw. That is the entire point. A revocable trust gives you no Medicaid protection whatsoever. Because you kept control over the trust during your lifetime, the Health Care Authority counts those assets as yours, because they are. It doesn't matter that the trustee has discretion, or that distributions are restricted in timing or purpose. Any pathway back to you, and the asset counts. To get the protection that many people are looking for to qualify for Medicaid, the door has to genuinely close. The math that drives the conversation Medicare pays for a limited stretch of skilled nursing care after a qualifying hospital stay (usually around 20 days at full coverage, with cost-sharing after that) and it ends well short of long-term custodial care. It is not a long-term care program, and most families discover that at the worst possible moment. Washington's Apple Health long-term services and supports program picks up where private funds run out, but only once your countable resources are down to roughly $2,000 for a single applicant, with a protected allowance for a spouse who remains at home. Meanwhile, WA Cares began paying benefits on July 1, 2026. Washington rolled this program out as the first state long-term care benefit in the country, with a lifetime benefit of $36,500 in 2026, indexed going forward. That is genuinely useful money. It is also roughly a few months of nursing facility care at current Washington rates. It changes the arithmetic at the margins; it does not change the plan. So the planning question stands: what happens to the house, the land, and the savings you spent forty years building? Why not just gift it outright? Before 2005, there was a real reason to prefer outright gifts. Federal law used a three-year lookback for outright transfers and a five-year lookback for transfers into trust, so a trust carried a penalty that gifts didn't. The Deficit Reduction Act of 2005 ended that. Both are now subject to the same 60-month lookback. Washington says that uncompensated transfers within the 60 months before you attain institutional status or apply for LTC services generate a penalty period, calculated using the statewide average daily private nursing facility cost, and the penalty doesn't even begin to run until you would otherwise be eligible (until you're already broke and already need care). The playing field is level. And once the timing cost is identical, the outright gift has nothing left to recommend it. What the trust does for you that a gift does not Here is what you give up the moment you sign a deed to your children instead of funding a properly drafted trust: 1. Protection from your children's creditors (and their divorces). A gifted house is your son's asset. It is exposed to his creditors, his business failures, and his dissolution proceeding. Trust assets, properly structured, are not. This is the risk clients underestimate most, and the one I have watched cause the most damage. 2. The capital gains exclusion on your home. Under IRS rules, you can exclude up to $250,000 of gain on the sale of your principal residence ($500,000 for a married couple). Gift the house outright and that exclusion is gone; your children take your basis and sell into the full gain. A trust drafted so you retain the necessary interest preserves the exclusion. 3. Step-up in basis at death (which matters more in Washington than almost anywhere else). A gift is a carryover-basis transaction: your kids inherit your 1978 purchase price. Assets that remain in your taxable estate get a basis adjustment to date-of-death value instead. And because Washington is a community property state, community assets receive a step-up on both halves at the first spouse's death under IRS regulations, a benefit that separate property states simply don't have. An outright gift forfeits it. A trust drafted with the right retained powers keeps it. There is a tradeoff here worth naming: keeping assets in your taxable estate for the basis step-up also keeps them in your estate for Washington estate tax, which starts at a $3,000,000 exclusion for deaths on or after July 1, 2026. For most families that threshold is never in reach and the step-up wins easily. For larger estates, it's a real decision, and one reason these trusts get drafted differently depending on what you own. 4. Control over who pays the income tax , and 5. control over who receives trust income both of which can be controlled using a trust, and neither of which exists once you've handed over a deed. 6. Genuine noncountability for Apple Health, SSI, and other means-tested programs, once the lookback has run. 7. A succession plan. A gift ends the story. A trust says what happens next: to a grandchild's share, to a beneficiary who predeceases you, to a child who needs a special needs subtrust rather than an outright distribution. 8. Flexibility you can preserve deliberately. A limited power of appointment lets a trusted person redirect shares among a defined class after you've lost the ability to amend. You give up control; you don't have to give up adaptability. The Washington point that changes the analysis This is the part that gets left out of most national articles, and it is the reason I push back hard when a client tells me they've "already handled it" with a TOD deed or a community property agreement. Washington is an expanded-estate recovery state. For deaths on or after September 14, 2006, the "estate" the State can recover against includes not only the probate estate but nonprobate assets plus any life estate interest held immediately before death. Read that list slowly, because it covers nearly every probate-avoidance device Washingtonians actually use: - Transfer on death deeds - Community property agreements - Joint tenancy with right of survivorship - Payable-on-death and transfer-on-death accounts - Assets passing at death through a living trust In a probate-only recovery state, a TODD gets the house past the State. In Washington, it does not. Recovery applies to recipients who were 55 or older when they received the qualifying long-term care services, and Washington's hardship provisions generally delay recovery rather than cancel it. A properly drafted and timely funded irrevocable trust is different in kind, not degree. The asset was given away during life, outside the lookback, with no retained interest and no death-triggered transfer. There is nothing left in the estate for the State to come after. That is the Washington case for the trust, and it is a strong one. Who this is not for I turn people away from irrevocable trusts regularly, because they are not always the right choice for everyone. If you're already in crisis, it's too late for this tool. The 60-month lookback means a trust funded the month before a nursing home admission accomplishes nothing except cost. Crisis planning is real, and there are things we can do (spousal allowances, exempt transfers to a spouse or disabled child, the caregiver child exception, annuities, undue hardship) but they are a different conversation with different tools. If you're in your fifties and healthy, it's usually too early. Giving up permanent control of your assets thirty years before you might need care is a steep price for insurance you may never claim. If you may need the principal, don't do it. Not "probably won't." Can't. If there's any scenario where you need that money back, the trust is either the wrong plan or drafted so loosely it won't protect you anyway. The sweet spot is a client who is comfortable, healthy enough to expect five more years, clear about what they don't need, and specific about what they want protected. What to do next Irrevocable trusts are not a form you download. The difference between one that protects your family and one that produces a five-year penalty period and a tax bill is drafting, funding, and timing…none of that can be evaluated from an article. If you are seeking assistance with estate planning, probate, adoption, real estate transactions, or business legal questions, please don't hesitate to reach out to the experienced team at Limitless Law PLLC. Call 360-685-0145 or click here to learn more.

A plain-English guide for Washington families on benefit-safe estate planning for a disabled child or beneficiary