Boston Medicaid Trusts Attorneys
A Medicaid trust is a trust established for the purpose of protecting the trust principal from the cost of long-term care. In a typical Medicaid trust, income earned of the principal will be available to the grantor, but the grantor is not permitted to have access to the principal. Principal may be distributed to the class consisting of the grantor’s children and the grantor may reserve a limited power of appointment to designate which of his or her children will receive the assets upon death.
Serving the Elderly and Their Families throughout Massachusetts
Upon death, the Medicaid trust assets will be divided equally between the children. The most important provision is the provision whereby the grantor is denied access to principal. In establishing a Medicaid trust, assets usually will be includible for estate tax purposes since income is payable to the grantor in the trustee’s discretion. Also, in some states, the grantor may serve as a trustee.
The family usually will receive a step-up in basis in assets upon death, thereby minimizing capital gain taxes if the property is sold after death. There will be no probate since the trust serves as a substitute for a will.
The trust also is flexible enough for the grantor to designate the final beneficiaries, even though the trust is for “irrevocable Medicaid eligibility purposes.” Remember, there is a five-year look-back so that assets transferred into the trust are not fully protected until five years after the assets are transferred.
The sooner you act to set up an irrevocable Medicaid trust, the better. Talk to a lawyer who understands irrevocable Medicaid trusts. Contact the Elder Law Centers in Boston, Massachusetts.
If you have questions about irrevocable Medicaid trusts, send us an e-mail or call 617-523-1555 or toll free 888-759-5109. Free initial consultation.
