| Adding is subtracting….read on:
READER QUESTION:
Can other assets be added to an existing irrevocable Medicaid trust at any time?
MY RESPONSE:
Yes, BUT DON’T!
Technically speaking, you can add assets to these trusts at any time. The problem is that each asset transfer added to the trust will carry its own 5-year look-back burden. IF you are finished (or substantially finished) with the first 5-year look-back, be happy that those assets are now or are about to be protected. Adding more assets to the trust will create another 5-year look-back which could be a problem. You see, if we don’t make it through the second 5-year look-back, we may want to return the transfer from the irrevocable trust to cancel out the look-back….but doing so will invalidate the whole trust, exposing the first transfer.
Therefore, if you want to protect another asset (or assets) it is best to create a second trust (or come up with another solution). Adding assets to the first trust potentially makes things worse, not better. Adding is subtracting! |
