Mom has dementia and is being coaxed into the idea of selling her home, and combining the profit with the profit of one of her adult son’s home when he sells it so they can live together and he can care for her. Mom’s home had been in an irrevocable trust for 8 years now. It was my understanding that the home couldn’t be sold as to protect her from Medicaid. If they do sell it wouldn’t the profit have to stay in the trust?
I am one of the fiduciaries and a trustee for her trust.
Either way, do not combine her funds with anyone else. Consult an elder care attorney.
I think her son needs to talk to a elder lawyer.
See an attorney. And by all means, DO NOT combine any of mom's or trust's assets with anyone elses, for anything.
Get that attorney, at trust expense to protect mom.
This is my understanding from having become the Trustee of Trust for my brother during his life. BUT................
You need always to seek the advice of a Trust and Estate Attorney for these questions, NEVER of a Forum. The Trust pays for this advice. Make an appointment and have a list of questions at the ready. Being Trustee is an important legal Fiduciary appointment. Best of luck to you.
A trust is for the beneficiaries. For all the beneficiaries. Having the trust be for the benefit solely of the grantor defeats the purpose. In this case, if the house is sold and the funds go back to mom, then what was the point of putting it into the trust to begin with?
Medicaid eligibility is about countable assets. A countable asset is something that's under your control. A revocable asset is under the grantor's control. Thus if they need money for their care, why don't they just take money out of a asset they control? How is that not a countable asset? A revocable trust is a countable asset and should be spent down before medicaid is granted. It doesn't protect assets for inheritance. That's the way it should work. I understand that many times it doesn't. People do get away with a revocable trust. But that's seems to be because the person approving medicaid coverage doesn't realize what a revocable trust is. They just see trust and assume it's not countable. People get lucky.
"A "revocable" trust is one that may be changed or rescinded by the person who created it. Medicaid considers the principal of such trusts (that is, the funds that make up the trust) to be assets that are countable in determining Medicaid eligibility. Thus, revocable trusts are of no use in Medicaid planning."
https://www.elderlawanswers.com/medicaid-and-trusts-12004
When she dies, I became the trustee, and it automatically went from revocable to irrevocable. I could not add anything into the trust, nor change the terms of it. The only thing I could do was distribute the funds to her beneficiaries.
"Mom’s home had been in an irrevocable trust for 8 years now.", that's well beyond the look back period for medicaid as a countable asset. It's no longer mom's house. It's the trust's house. That's the whole point of putting it into a trust.
If you are the trustee, then you have a fiduciary responsibility to everyone that's a beneficiary of that trust, not just that one son. Not even just to mom. So does selling that house make sense for all the beneficiaries of that trust?
Since you are asking these questions, it's best if you consult a lawyer.