Mom has a revocable trust for her possessionswhich is mainly her house. Human serviced says that makes her not elgible for Medicaid because he cant have over 2000 in assets-
Get Legal Help Today
Compare Quotes From Top Companies and Save
Secured with SHA-256 Encryption
Mom has a revocable trust for her possessionswhich is mainly her house. Human serviced says that makes her not elgible for Medicaid because he cant have over 2000 in assets-
Normally a house in someones name does not count as an asset. Department of Human
Service stated, because it is in a revocable trust she would have to count it as
an asset instead. That will make her ineligible for medicaid due to assets would
be more that 2000. I don’t know if this is really true. Will it matter if we
change it into a irrevocable trust or just remove it from the trust all together?
Your advise is greatly appreciated
Cindy Packard
Asked on February 28, 2019 under Estate Planning, Colorado
Answers:
SJZ, Member, New York Bar / FreeAdvice Contributing Attorney
Answered 5 years ago | Contributor
The problem with revocable trusts for this purpose is that they are revocable: they can be revoked or undone at will, so that the property comes back to its original owner. That degree of control over the asset means that it is effectively (for all practical purposes) their property, and so it is counted against them.
It may not be possible to change it to an irrevocable trust or remove it fro the trust right now, since there is a five-year "lookback" period for transfers of assets (changing ownership): if the house is removed from the revocable trust without paying the trust the current fair market value for the house, that will be considered a transfer made to defraud Medicaid if she needs Medicaid within 5 years of the transaction. Making adjustments to asset/property ownership to try to protect them from Medicaid needs to be done in advance, more than five years before you need Medicaid. Otherwise, if done within five years of needing Medicaid, non-fair-market value transfers will typically be deemed fraudulent.
While it's worthwhile to consult with an estate planner to see if there is some way to keep the house while qualifying for Medicaid, there might not be: you may need to sell the house, spend the money from it for her medical or assisted living care, then have her go on Medicaid when all but her last $2,000 is used up.
IMPORTANT NOTICE: The Answer(s) provided above are for general information only. The attorney providing the answer was not serving as the attorney for the person submitting the question or in any attorney-client relationship with such person. Laws may vary from state to state, and sometimes change. Tiny variations in the facts, or a fact not set forth in a question, often can change a legal outcome or an attorney's conclusion. Although AttorneyPages.com has verified the attorney was admitted to practice law in at least one jurisdiction, he or she may not be authorized to practice law in the jurisdiction referred to in the question, nor is he or she necessarily experienced in the area of the law involved. Unlike the information in the Answer(s) above, upon which you should NOT rely, for personal advice you can rely upon we suggest you retain an attorney to represent you.