Livonia, MI asked in Estate Planning for Ohio

Q: Irrevocable trust Settlor question

My mom is trying to create an irrevocable trust to protect her assets. Upon her passing it would be split between my sibling and myself. The firm she is using has my sibling as the "Settlor" and the 2 of us as "Trustees" . I'm concerned as the way the document is written it seems my Mom should be the Settlor. When questioned, they said they do it this way to hide the money from Medicare. Is this right?

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1 Lawyer Answer
Beverly A Stull
Beverly A Stull
  • Estate Planning Lawyer
  • Cincinnati, OH
  • Licensed in Ohio

A: No. Your mother should be the Settlor. There is no need to hide money from Medicare; they were probably referring to Medicaid, which can look back 5 years to see if there were any transfers for less than Fair Market Value for the purpose of Medicaid eligibility. If your mother needs Medicaid within 5 years of funding the trust, you or your attorney would have to lie when they ask if there have been transfers. If Medicaid asks to see 5 years of records, they will question the transferred money.

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