I first would like to thank you for ALL the great advice you have given through this informative site!
Secondly, my question is this…at the time I set up my irrevocable Medicaid Trust, I did not include my house. If I now add my house, does the 5-year look back start all over again? I have had the trust for 5 years now, and as I’m in my 70’s, I’d hate to have to start all over again. What do you recommend?
Any transfer you make of your house at this time (unless some exemption applies) will cause a new 5-year look-back. But there is a smart and a not-so-smart way of doing it.
The smart way may be to create a second trust to receive the house. The five-year look-back is over for the first trust and you should not mess with it; all the assets in the first trust are already protected. If you absolutely know that you will stay healthy for five more years then you could put the house in the first trust…but as they say, man plans and God laughs! Since we do not really know the future, it is best to be conservative and set up a second trust.
The real problem is that if you put the house in the first trust but do not make it through the new five-year look-back, then you may have to bust the first trust to return the house, exposing all the assets. IF we are only busting the second trust, the assets in the first trust will remain protected. A lot depends upon timing but that is my best advice. By the way, the ability to bust/revoke the trust may not always be available.
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