The Listen to Lawrence Letter: Here we go again! Irrevocable Trust Rules

May 24, 2024
May 16, 2024 • Volume 5 Issue 244


My Mom has an irrevocable trust, her primary residence is in the trust. She has qualified for Medicaid. Her taxes are approx $11,000 per year. Her income cannot cover her taxes. At this point can we use money in her trust account to pay her real estate taxes? Thank you.


I have answered this question probably 20 times now but I will keep answering it because it is so important. The answer continues to be NOOOOOOOOOO!

The bottom line is that the taxes (and insurance and maintenance) are mom’s responsibility. If the trust pays mom’s bills, then mom is getting her money back from the trust…and if mom can get her money back then so can Medicaid. If you do this once, then the entire trust no longer works and the assets in it will no longer be protected from Medicaid.

On the other hand, if the trust pays out money to the children and the children pay the taxes, then this is permitted. Please remember that when the children get this money they are under no obligation to pay the taxes but may instead use the money for the down payment on their new pool in their backyard.

I hope this helps! Please forward this information to your friends and relatives to share these informative answers to some very commonly asked questions.

And, if anyone you know would like to

receive this Listen to Lawrence Letter just

tell them to send their email address to and I’ll add them to the list!

As always, please send your questions in! If you are thinking about it, others are probably too, so my answers will no doubt help you and many others.

Let’s stay connected. Stay safe!