How Can a Trust Help- The Uses
Let’s say this child has special needs, now this child has an asset. If you know a little btit about Medicaid a primary residence is not counted a resource, as long as the child is living in that house, that twenty-two percent interest is isn’t going to disqualify them, but lets say instead of a house, that was a brokerage account. That had one hundred thousand dollars in it, that’s twenty two thousand dollars in resources. Guess what we have to do with that twenty-two thousand dollars before they are again eligible? This even applies to the deeming waiver because the deeming waiver just simply ignores the parents income and resources, it does not ignore the child’s income and resources. By law, that child would now have that twenty-two percent interest it is an accountable resource, even for the Katie Beckett Deeming Waiver. So, we would then have to do something with that twenty-two thousand dollars. Medicaid takes a very dim look at a Medicaid recipient simply saying, “I don’t want it” You can’t do that, if you do that it’s an improper transfer of an asset, there’s going to be a penalty period. Equal to and they will calculate what it is. Some other problems are other ways assets are accidentally or intentionally winding up in the child’s name. is an improperly drafted will. Many times, a will is drafted and it will include that child, that can be a problem. Another problem is an improperly drafted trust. A trust can either be in a will or a stand-alone trust, but if that trust does not contain specific language, Medicaid and SSI is going to review that trust and say “You know what, trustee, you have the legal obligation to support this child” It doesn’t matter how old the child is either, if you have the legal obligation to support the child with this money than all of that money is an accountable resource, and Medicaid and SSI is absolutely right, if there is a legally enforceable right that the child must be supported by that money, than Medicaid and SSI are going to count that money, even thought it’s in a trust. The trouble with it being in a trust is that we have less options of what to do with it, an improperly drafted trust is more problematic than giving the child the money outright. It’s than a little bit easier to fix and but it still involves the court, it still involves significant cost, but it can be fixed. With an improperly drafted trust, what we wind up having to do is go and reform that trust. That’s’ a little bit more complicated and involves the superior court rather than the probate court, it can get more costly very quickly. It all depends on how much money’s involved whether it’s even worth doing.