| Use of sale proceeds within the trust…read on:
CLIENT QUESTION:
You made an irrevocable Medicaid trust for me and my daughter with a 5-year waiting period for Medicaid. Among other assets, we transferred a piece of land into the trust that is now going to be sold within the trust. If we want to use money from that land sale, does the 5-year waiting period start from then?
Thank you.
MY RESPONSE:
I am not really sure what this question is asking but I will make it a cautionary tale. If the trust sells the property, the trust gets the money. The trust, within certain limitations, can purchase another asset for the trust, as long as whatever is purchased is not for your use or benefit (without causing another 5-year lookback). The trustee can not buy you something or give you the money to buy something. If it did, the trust would not have a five-year look-back problem, it would have a trust destruction problem because the trust would be destroyed for Medicaid protection purposes. On the other hand, the trustee can, with your consent, pay the money out to your beneficiaries (children?) who can use the money for anything they desire.
I hope this helps. |
