A type of living trust often used for Medicaid planning. It protects assets from being sold to pay for nursing home and other long-term care expenses, so that the assets can be passed on to beneficiaries. Once assets are transferred into the trust, certain restrictions are placed on their use. However, the grantor retains the right to any income generated by the trust assets. The grantor also has the right to use, live in and sell any real estate held in the trust, as well as buy another property with the proceeds of any sale.

The trust agreement should describe the trust name, trust property, appointment of trustee, appointment of trust protector, power over trust property, when beneficiaries may appoint a successor trust protector, fees and expenses due to the trust protector, the purpose of the trust and the management and distribution of the trust during the grantor’s lifetime. By requiring such detail, IIOTs leave little room for doubt and are nearly impossible to break as long as the trustor was in his or her right mind at the time of the trusts creation.