I will consult with an attorney, however I wonder what experience or knowledge anyone may have to help?
I am the sole trustee and have 2 siblings. My mom has a trust that I've just begun as successor. I understand assets in the trust are subject to the 5-year look-back rule. However, how does the 5-year rule affect her home, which is not in the trust? If nothing happens to it, I believe it is sheltered, but what happens if I sell it while she is still alive and we ran out of money funding her care and required Medicare or medicaid or the state (California) to pick up her care costs?
Would the sale of the home then be under scrutiny? She's pretty adamant that she wants the home sold and proceeds to be distributed once she has settled in to her assisted living home. I'm not so sure the proceeds would be sheltered.
Any thing to help educate me to make informed decisions is appreciated.
Thanks
I think it is now a legal requirement that the attorney educate people on what needs to be done with assets and renaming, transferring etc. This wasn't the case decades ago. So elders are finding out the hard way now.
But, the point is her assets are for her care first. Your responsibility is to your mom, first. As trustee everything you do must be for mom's benefit. You first job is to keep mom's assets safe to use for her care. Any distribution is after her death.
Look up Breach of Fiduciary Duty. You do not want to go there. Wouldn't you much rather mom have a wide choice of facilities then to be limited to those that accept MediCal?
See that attorney!
Thanks
If the house is sold at fair market value and all the proceeds go towards her care, you should be fine.
She can't even put the money in the trust at this point, considered gifting and will create a penalty where there is no coverage to be had.
I would see a certified elder law attorney, www.nelf.org is where you will find one. They can guide you to ensure that mom isn't left hanging because of bad decisions now.
As Successor Trustee you could choose to sell this home for your Mother through the trust as I understand it, and the proceeds would be hers and go to her care. Or the home could remain in the Trust. What happens then with medicaid clawback I am not certain, but if the home is NOT in the trust there will be clawback after her death and upon sale of it.
If the home isn't in the trust why was it created?
Her money unless this is an IRREVOCABLE trust does go to her care while she is living. My brother's ALF bills were paid through his trust account.
Are you ALSO her POA because if you are ONLY Trustee you cannot sell a home that is not in the Trust. You should have been created POA and Trustee of Trust to operate for your Mom when she cannot, and in her best interest.
As the Trustee the Trust pays for you to SEE AN ATTORNEY and that is what you need to do. Don't ask Forums for complicated legal advice because a wrong move could be both illegal and a disaster.
So the Trust pays. Find a good Trust and Estate attorney and take all your questions to him or her. I found my attorney to be INVALUABLE when I took on being Trustee,, POA, and later executor for my brother.
Good luck.
Who would work hard and then go into a potential s#!thole facility so someone else could benefit from their hard work?