| Reverse Mortgages and Medicaid trusts
CLIENT QUESTION:
Good morning – An individual’s reverse mortgage guidelines require that the borrower (who is the Grantor of the Medicaid Trust) be the only current beneficiary of the Medicaid trust. The lender wants to remove the trustee’s authority to distribute reverse mortgage proceeds to the grantor’s children and to allow the trustee to distribute reverse mortgage proceeds for the benefit of the grantor/borrower on a supplemental needs basis. Wouldn’t making the borrower/grantor the beneficiary of the trust defeat the trust for Medicaid purposes? Thank you!
MY RESPONSE:
Of course this would screw up the trust! Run from this lender and call Frank Melia at Contour Bank. I do not know anyone who knows more about this subject. You can reach him at 516-879-7262.
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