| It is the prerogative of my clients to change their minds…read on:
CLIENT QUESTION:
I put my home in an irrevocable trust and named several beneficiaries. Can I change the trust beneficiaries that I had named in the irrevocable trust?
MY RESPONSE:
Good news! Almost every irrevocable Medicaid trust I have ever done has retained the right to change the trust beneficiaries for my clients. This retained power is called a POWER OF APPOINTMENT. It is actually a LIMITED POWER OF APPOINTMENT because we limit the class of possible beneficiaries to the usual suspects: children, grandchildren, and perhaps great-grandchildren (simplified as “my children and their issue”). Sometimes we expand the class to siblings and their issue and perhaps the spouse of all the above. This can be tailored but it is usually just your children and their issue.
So, when your children forget your next birthday, you can remind them
that you can change the beneficiary of your trust eliminating their inheritance. 😊 Remember, you are still in charge!
One caveat, there was a period of time in the early 2000s when we were concerned that this retained power could pose a problem with Medicaid, so we drafted the trust without the power of appointment. However, soon thereafter, a couple of court cases came down in our favor and the retained powers were quickly put back in our forms going forward. This lasted for no more than one year. Therefore, it is possible that your trust does not have this power if it was created within this short window. I can’t remember the actual dates, but a quick reading of the beneficiary section of your trust will give you the answer. |
