Elder Law Answers
Can I Convert a Revocable Trust to an Irrevocable Trust When I Apply for Medicaid?
I recently had my living trust updated after 20 years. Now I regret that I didn't conve...
Read moreCan Property in an Irrevocable Trust Be Sold or Gifted Without Restarting the Medicaid Look-Back Period?
- September 9th, 2016
Q
My parents have an irrevocable trust that contains land, money, and real property. It was set up as part of Medicaid planning. If the trustees sell a part of the land, would it reset the five-year look-back period? Also, does this land have to sell at "market" value or can it sell to family at a discounted price? Finally, could this land simply be gifted without resetting the five-year look-back period?
A
To start off, you need to check with a local elder law attorney to be certain of the answers because different states interpret the rules differently and it is important to see the actual wording of the trust. That said, here are the probable answers: (1) The trust can sell the land, but the proceeds of the sale must remain in the trust. (2) If the trustees sell the land for less than its market value they may be violating their fiduciary duty to the trust beneficiaries. But if the beneficiaries approve of the sale, then the trustees could be protected from potential liability. (3) The land could be gifted if the trust permits distributions to the recipients in the proportions anticipated. This should not start a new five-year clock (but this might be the most important issue to confirm with a local elder law attorney). To find an attorney near you, go here: http://www.elderlawanswers.com/elder-law-attorneys.
For more about Medicaid and trusts, click here.
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Jeffrey Hammond
Hammond and Associates, LLC, Elder Law, Estate Planning, Wills, Trusts, Probate
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Attorney Samantha Simmons Fredieu is an associate at Hale Ball. Ms. Fredieu graduated magna cum laude from Vermont Law School where she was the symposium editor on the Vermont Law Review, a production editor on the Vermont Journal of Environmental Law, and a member of the Moot Court Advisory Board. She has clerked for...
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Bill founded The Estate Planning & Elder Law Firm, P.C. in 1994. Bill limits his practice to the areas of estate planning and administration, incapacity planning, Medicaid, asset protection planning, and elder law. He is one of (15) fifteen attorneys practicing in Virginia, Maryland and the District of Columbia, ce...
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Jeffrey Hammond
Hammond and Associates, LLC, Elder Law, Estate Planning, Wills, Trusts, Probate
For Jeffrey Hammond, the practice of Elder Law is personal. Jeff’s many years of experience in law and in business did not prepare him for the crisis he faced in 2005 and 2006 when his father suffered a stroke and both of his parents suffered from dementia and other medical problems. At that time, Jeff began an i...
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