I'm not sure there is enough information here to answer the question you have asked. However, I would suggest that you have the trust reviewed either by the attorney who drafted it or an attorney with whom you are comfortable. It's not impossible for a trust to have the restriction you describe, but it would be unusual. That attorney could also gather more information to perhaps answer the medicaid situation also.
This answer is for informational purposes only and should not be considered specific legal advice, nor does it constitute an attorney-client relationship.