The Listen to Lawrence Letter: Can I pay for improvements to my home?

CLIENT QUESTION:

Hello Lawrence,

I currently have a pebble-covered driveway that has been compressed and invaded by weeds over many years, probably 20 years. It devalues my house even after 2 sprayings with weedkiller every summer. I’d like to do a more permanent solution than recovering my driveway with new layers of pebbles with a cobblestone apron installed to prevent the pebbles from entering the road during winter plowing. My permanent solution options are paving my driveway with cement, blacktop, or pavers.

Now my question: Will any of these repairs trigger a new 5-year lookback for my irrevocable trust? My house is the only entity in the trust. I thank you for your response and all your help over the years. Client since 2011.

MY RESPONSE:

Whether it’s a new driveway, new roof, new boiler, or other maintenance questions, the answer is always that you may pay for these improvements without causing a new 5-year lookback.  The way we design these trusts is that you retain the right to live in the house, and you retain the privilege of paying the taxes and maintaining the house in good condition. Where people get into trouble is when they go too far, going from maintenance to elaborate improvements to the house. In your case, I believe you are safe. The real question is, does the expense feel more like an obligation to keep the house in good order or a gift to the trust? Putting in a pool when there was none before is an example of going too far. What you should learn from this is to check in with us first to stay out of trouble.

I hope this helps!

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