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Read moreShould We Put Our Home in Trust for Our Disabled Grandchild?
- February 23rd, 2024
Q
Can one or both grandparents of a special needs grandchild put their primary residence in a trust with his mother as trustee in Wisconsin? And can it be considered a divestment for the grandparents if they need to go on Medicaid after establishing the trust before the five-year lookback, or would it just be for the stay-at-home spouse to have to stay off Medicaid for five years and one day?
A
Yes, the grandparents could put the house in trust for their grandchild with special needs. There’s an exception to the usual Medicaid transfer penalty for transfers into trusts for the sole benefit of a disabled individual under the age of 65.
However, we recommend that you consult with a local elder law attorney or special needs planning attorney because there are other considerations here, such as the tax implications of such a transfer, issues of paying for the property’s maintenance, and proper drafting of the trust.
Also, since this can be done at any time, there’s no reason to do the transfer prior to needing Medicaid benefits. There may be better plans to put in place if it’s not clear that the grandparents will need to apply for Medicaid.
Harry S. Margolis practices elder law, estate, and special needs planning in Boston and Wellesley, Massachusetts. He is the founder of ElderLawAnswers.com and answers consumer questions about estate planning issues here and at AskHarry.info.
Last Modified: 02/23/2024