I live in NY State and went to a lawyer recently to have a will made. This lawyer told me I needed a trust for my 33 yr. old son who has Autism and is on SSDI. He also said I need a trust for my house if I want to keep it for my kids and not have medicaid take it if we go into care. I don't really want to put my sons money in a trust since he is fairly good with money; I just want his sisters to help him out with his part of our inheritance. My daughters have problems of their own ( special needs kids) and I hear that taking care of a trust is labor intensive and expensive.The lawyer said he can't have any assets in his name which I think is incorrect for someone on SSDI.
I have never heard of anyone putting their house in a trust which means if we sell it ahead of time, we cannot rent a new house but have to buy it with the money from our present house in order to keep the trust intact.
I am confused about all this. Does anyone else have thoughts on if this is true? I did not go to a special needs lawyer because they are so expensive and I really didn't want a trust for my son and I never heard of anyone not being able to sell their house and after that rent somewhere. Is there any other way to keep your house for your kids?
If you yourself aren't an attorney, then why are you second-guessing someone who is? Maybe get a "second opinion" from the correct type of attorney. Someone with specific experience creating trusts.
But if he receives Medicaid for health, he could lose it because of an inheritance. Once the inheritance is spent down, then he reapplies for Medicaid.
I would not put his inheritance in a Special Needs trust. I handle my Nephews and it can only be used for certain things. No housing, no food, no utilities because you can get these with help from agencies. Its very very limited. And when son passes, any remaining money goes to Medicaid. I think a regular Trust would be a good thing. Talk to the lawyer and make sure it won't effect the help he is getting.
My nephew is on the autistic spectrum. He lives on his own and is doing well handling his SSD but I would not allow him to handle money an inheritance may bring him.
A Trust will be only valid if you draw all assets into it. That is to say the accounts will now say "Trust of" and the home deed will need to say "Trust of". And you would put your smartest most able child in charge of the Trust upon your death as the Trustee, to do exactly what the Trust says. If they need help they hire an attorney, just as you have, or a Fiduciary. And the money is either divided and the trust "dispersed" or keeps functioning to give your son an "allowance." As to SSDI rules, I don't know them, but a Trust and Estate attorney WILL know them for your area. It was always my understanding that someone on ANY government assistance cannot hold substantial amounts of money, and that was the "why" of special needs trusts". But I surely could be wrong on that one.
This decision can only be yours. If there is substantial funds involved then I would get the Trust. If there is just a home and some few accounts I would do a simple will, and I would put names on those accounts as POD (pay on death) so they don't go through probate.
It's in your hands, and the advice of an attorney is good as you get. Ask all the questions you can think of and I sure do wish you the very best of luck. Whatever choices you make discuss them ALL with ALL your kids together so they understand how it stands.
As for selling the house my husband and I are in OK shape but if that changes or one of us has to go to a nursing home, we can't stay here. We are very rural and alone. I would not like to have to buy another house at this stage of the game and not being able to rent has thrown me for a loop. My house and a little extra is all I have to leave for my 5 kids, and I would like for Medicaid not to get it. I guess I have a lot of thinking to do.
I will contact the Bogleheads so I know what kind of lawyer to go to and more questions I should ask. The more I know the more confused I seem to get!!
If anyone else has suggestions, I'd love to hear them!
This system goes along just fine & dandy as long as the parents are alive and have use their the funds, like they use their monthly SSA income to pay bills. It’s all OK.
BUT
should something happen to change that, house becomes a problem. Unless family is truly prepared to take over all costs 100% till an undetermined period of time, house can become an albatross. If you do the house in a Trust please please pls do other significant assets titled into the same Trust that make $ and are managed by a financial advisor and the attorney for the Trust.
I’ve been on the forum a long time and what comes up over & over time & again, is the kids are gobsmacked & surprised that LTC Medicaid requires their elders to do a copay of almost all their monthly income to the NH. All elders in a NH on Medicaid get to keep is a smallish PNA personal needs allowance of $35-115 a month. PNA avg is $50/$60. So realistically is just enough for the on premises beauty or barber shoppe visits and some toiletries replacement. No-nada-zero $ for property taxes, roof repair, insurance, whatever. Family start squabbling as to who pays for what; inevitably someone in the family will refuse to pay a penny. Neighbors who so loved mom, now not so nice about that house with its unkempt yard. House becomes an albatross.
Yeah, Property is nicely secured in a Trust done 5+ years prior so in theory outside of Medicaid estate recovery but if family and heirs (the end beneficiaries) won’t pay & do for however many years needed till beyond the elders grave, the house becomes a constant problem.
Trusts imho really need other assets (stocks) besides the house titled in the Trust that make $ and “feed” the Trust. So those assets make income & this income used to pay taxes, insurance, whatever, should the elder not be able to use their outside funds. Trusts defund.
You see at tax sales properties that are delinquent for property taxes that are titled in a Trust, or LLC, or Life Estate. They get a redemption done & sold just as easily as a home in a person’s name.
With SSD I would go to an elder attorney who knows Medicaid. My nephew also has an annuity for his Moms pension. I am payee. Money goes into his annuity acct ea month and I transfer it to his checking account. Since I am on all his accts, I can oversee his spending. You could have the money placed in an annuity and a certain amount going into his bank acct monthly. Just another avenue. But a Special Needs Acct may be the only way to guarantee his Medicaid is not stopped.
I believe that SSDI is a means tested program; meaning that if your son inherits money outright from you, he will no longer be eligible for SSDI or Medicaid. He would have to re-apply once his inherited money runs out.
I assume that the lawyer is looking to put the house in an irrevocable trust in order to keep it from being subject to Medicaid Recovery.
If you are looking to move to a rental, why not do that now and put the funds from the sale (minus capital gains) into the trust. Or into a Medicaid compliant annuity to pay for your care?
https://www.ssa.gov/policy/docs/ssb/v66n3/v66n3p53.html#:~:text=Social%20Security%20disability%20benefits%20are,by%20a%20self%2Demployed%20person.
I'm the Trustee for my parents' trust and took it over before they died because they were not capable of handling their finances. After they died, I just transferred half of their assets to my brother, and that was it. No courts were involved, and no probate was opened. It's private and not public information.
Get on the internet and read up on trusts and special needs trusts. You really need to understand how they work so you don't make a bad financial decision.