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Mom has dementia and is being coaxed into the idea of selling her home, and combining the profit with the profit of one of her adult son’s home when he sells it so they can live together and he can care for her. Mom’s home had been in an irrevocable trust for 8 years now. It was my understanding that the home couldn’t be sold as to protect her from Medicaid. If they do sell it wouldn’t the profit have to stay in the trust?


I am one of the fiduciaries and a trustee for her trust.

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I don't believe so. Are you sure it's irrevocable? Not too many people put their stuff into an irrevocable trust -- it's usually revocable.

Either way, do not combine her funds with anyone else. Consult an elder care attorney.
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SavingMom2014 Feb 2022
Yes I just checked and it is irrevocable. Thanks, I’ll check with a lawyer about it. I didn’t think it was appropriate to combine funds either
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With Dementia she cannot enter into a contract. Who has POA? The future has to be considered if Mom needs Medicaid in the next 5 years. Any proceeds from her house needs to put in a bank account for her needs. Medicaid will look at her son using her money as "gifting" and there will be Medicaid penalties.

I think her son needs to talk to a elder lawyer.
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SavingMom2014 Feb 2022
Thank you! I’m POA along with my sister. You mention gifting and I’ve seen that on checks she’s written that say gift, I wasn’t sure why she is writing that on her checks when she never did before. Unless others are telling her to put that on there.
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When was the trust formed? Now I See 8 years ago.

See an attorney. And by all means, DO NOT combine any of mom's or trust's assets with anyone elses, for anything.

Get that attorney, at trust expense to protect mom.
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needtowashhair Feb 2022
As per OP, "Mom’s home had been in an irrevocable trust for 8 years now." It's well past the lookback period.
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Need to wash hair. You would need to be certain the home, when placed in the trust, had the deed done to reflect that the home now belonged NOT to Mom but to the Trust. An irrevocable Trust is just that. The current Trustee can manage the Trust but cannot change the trust. This is the problem with an "irrevocable trust", that even the grantor cannot easily change it. And when the grantor may want those funds for their care, they are not there. This protects assets for their children, but the assets SHOULD be for them in their lifetimes.
This is my understanding from having become the Trustee of Trust for my brother during his life. BUT................
You need always to seek the advice of a Trust and Estate Attorney for these questions, NEVER of a Forum. The Trust pays for this advice. Make an appointment and have a list of questions at the ready. Being Trustee is an important legal Fiduciary appointment. Best of luck to you.
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needtowashhair Feb 2022
If the deed wasn't done correctly, then that home is not in the trust. It wasn't placed in there to begin with. OP says it is in the trust. We can only go with what OP says.

A trust is for the beneficiaries. For all the beneficiaries. Having the trust be for the benefit solely of the grantor defeats the purpose. In this case, if the house is sold and the funds go back to mom, then what was the point of putting it into the trust to begin with?

Medicaid eligibility is about countable assets. A countable asset is something that's under your control. A revocable asset is under the grantor's control. Thus if they need money for their care, why don't they just take money out of a asset they control? How is that not a countable asset? A revocable trust is a countable asset and should be spent down before medicaid is granted. It doesn't protect assets for inheritance. That's the way it should work. I understand that many times it doesn't. People do get away with a revocable trust. But that's seems to be because the person approving medicaid coverage doesn't realize what a revocable trust is. They just see trust and assume it's not countable. People get lucky.

"A "revocable" trust is one that may be changed or rescinded by the person who created it. Medicaid considers the principal of such trusts (that is, the funds that make up the trust) to be assets that are countable in determining Medicaid eligibility. Thus, revocable trusts are of no use in Medicaid planning."

https://www.elderlawanswers.com/medicaid-and-trusts-12004
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Needtowashhair, my mother set up a living revocable trust 20 years before she passed. It wasn't to hide assets in case of long term care, it was so when she died, her estate did not have to pass through probate, and that her estate would not become public record.

When she dies, I became the trustee, and it automatically went from revocable to irrevocable. I could not add anything into the trust, nor change the terms of it. The only thing I could do was distribute the funds to her beneficiaries.
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SavingMom2014 Feb 2022
That was my thought as well. I don’t believe it’s to hide assets. She has income and VA benefits so I assumed putting the house in the trust was to keep it from being sold in the event that her care could drain her accounts. And then the house would be sold to pay for her care. We wanted to make sure she had a home to go back to if that happened.
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If it's in a irrevocable trust then it's not mom's house, it's the trust's house. Who's the competent trustee? If mom has dementia then that's not her and she has no say in it. Who's next in line? Is that you? It's up to that person and whether it's allowed in the trust. The trust agreement will say whether it's permitted or not.

"Mom’s home had been in an irrevocable trust for 8 years now.", that's well beyond the look back period for medicaid as a countable asset. It's no longer mom's house. It's the trust's house. That's the whole point of putting it into a trust.

If you are the trustee, then you have a fiduciary responsibility to everyone that's a beneficiary of that trust, not just that one son. Not even just to mom. So does selling that house make sense for all the beneficiaries of that trust?

Since you are asking these questions, it's best if you consult a lawyer.
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SavingMom2014 Feb 2022
Thank you for your info. I am a co trustee with my sibling who wants the house sold so the profit when combined with his profit will be enough to afford a big home for them to share. He is also listed as one of 4 beneficiaries for the home and any other asset.
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Before anything, check with an attorney. For you to have your POA/or Trustee designation activated, your mother needs to be declared mentally unable to handle her affairs...this must be done by her doctor, in a letter form --something that you can then present to various entities to start dealing with the trust issues. But no, if the home is in a trust the Trust is the legal entity that owns it and therefore, the designated and legal Trustees are empowered to enact a sale or handle any affairs of the Trust and whatever properties/assets are in that trust.
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