| Worth repeating…Read on:
CLIENT QUESTION:
In an irrevocable Medicaid trust should the grantor or trustee pay the carrying costs of a residence and can the grantor make capital improvements to the residence? Also, can the trustee have the right to buy and sell real property that is in the irrevocable trust? Many thanks and loved your book; the dedication brought tears to my eyes! My dad was a WWII vet too.
MY RESPONSE:
Thank you for your kind words regarding my book. It was a labor of love and tears still come to my eyes as well when I think about my father and his stories.
The grantor (not the trustee) should pay for all carrying charges on the residence held inside the trust. As to capital improvements, there is no perfect answer for this. Medicaid could argue if the trustee makes the payments then the trustee is improperly benefiting the Grantor. If the Grantor makes the payments, then Medicaid could argue that the Grantor is making new transfers to the trust, subject to a five-year look-back. Both arguments are theoretical and we really do not know the answer. It is possible that neither scenario poses a problem. We can advise you on a case-by-case basis at the time as this situation evolves.
What is clear is that the Trustee can sell the house at any time and purchase another residence for the Grantor. |
