The Listen to Lawrence Letter: If you sell a home that is in an Irrevocable Trust, is the money from the sale subject to a Medicaid look back?

February 23, 2022
Dear Clients and Friends,
Here is another question concerning the sale of a home in a Medicaid irrevocable trust:
Is the money from the sale of the home that is in the family trust subject to a five-year look back?
I think you all understand by now that there is a five-year look back when you transfer assets, like your home, into a Medicaid irrevocable trust.  This five-year look back applies when you are asking Medicaid to pay for a nursing home. Today’s question involves the impact on the look back if the trustee later sells the house you had placed in your trust. Does the look back start all over again? Of course, upon sale, the proceeds will be deposited into a trust account and thereafter can be invested in something else, like another home.
Let me be clear, there is NO FURTHER LOOK BACK when a trust asset is sold within the trust. Look backs are only in play when YOU transfer something INTO the trust. So the answer to my client’s question is NO!
I hope this helps! Please forward this information to your friends and relatives to share these informative answers to some very commonly asked questions.
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Stay safe!
Until next time,
peace, health and happiness,
Lawrence Eric Davidow