| Trust Withdrawals…read on:
CLIENT QUESTION:
You created an irrevocable Medicaid trust for me seven (7) years ago. My son is the lone trustee. I gave him written permission, if needed, to withdraw (for himself) up to $1,000 per month, without any stipulations. Is this permitted without invalidating the trust?
MY RESPONSE:
YES! The trust is designed so that the trustee may pay out trust income and/or principal to your family, subject to your written consent. This does not violate the trust or Medicaid rules. Your written consent should indicate whether or not you wish the gift from the trust to be considered an advancement of his inheritance or not (whether it should be deducted from his eventual share).
Having said this, I am more comfortable with such withdrawals after the
five-year lookback has expired. If you need nursing home care within the
five-year lookback, we would be in a better position if all of the principal was still in the trust. The pros and cons of these withdrawals should be discussed with us before they happen…although $1000 per month shouldn’t make much of a difference in the long run.
I hope this helps! |
