Elder Law Answers
Can I Create a Special Needs Trust in My Will to Benefit My Husband?
I am age 74. Can I create a special needs trust in my will to benefit my husband if he ever needs Medicaid assistance to p...
Read moreIf I Put My House in Trust, Can I Still Withdraw From My Home Equity Loan?
- October 22nd, 2014
Q
I have a mortgage and a home equity loan outstanding. If I put the house in an irrevocable trust, can I still withdraw from my home equity loan, or will only the trustee be able to make withdrawals?
A
If you transfer your home to an irrevocable trust, the trust will be the owner. Doing so may technically violate the terms of the mortgage and home equity loan, making them both immediately payable. However, if you continue making the monthly payments. in all likelihood the bank will be none the wiser. In terms of withdrawing additional funds from the home equity loan, you (or someone you hire) would have to read the fine print to be sure, but again if no one is the wiser, you can probably do so. That said, doing so may undermine the purpose of the trust depending on your purpose for creating it – usually Medicaid, creditor protection or estate tax planning. To argue for these purposes that you no longer own the property but to continue to withdraw equity seems a bit inconsistent.
Local Elder Law Attorneys in Ashburn, VA
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Margaret O'Reilly
Margaret A. O'Reilly, PC
Margaret A. O’Reilly is an estate planning and elder law attorney with over thirty-five years of legal experience. Attorney O’Reilly graduated from Duke University with a degree in psychology, and received her law degree from Northeastern University School of Law in Boston, Massachusetts. For over 15 y...
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William Fralin
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Evan Farr
The Law Firm of Evan H. Farr, P.C.
In practice since 1987, Fairfax Attorney Evan Farr is widely recognized as one of the leading Elder Law, Estate Planning, and Specials Needs attorneys in Virginia and one of foremost experts in the Country in the field of Medicaid Asset Protection and related Trusts. Evan Farr has been quoted or cited as an expert by n...
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