The Listen to Lawrence Letter: Trading up Within a Trust

CLIENT QUESTION:

If you sell a house owned by a Medicaid trust for $500,000 and buy a new one for $600,000, does that trigger a new 5-year lookback?

MY RESPONSE:

NO, assuming no new money was transferred into the trust. Look-backs are only triggered when new money is transferred from the grantor into the trust, not a reinvestment of money already in the trust.

However, if the grantor added another $100,000 to the trust to buy the more expensive house, this is where new look-backs and problems begin.

The bottom line, if you are looking to upgrade your property within your trust, talk to us first.

And, if anyone you know would like to

receive this Listen to Lawrence Letter just

tell them to send their email address to info@davidowlaw.com 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!