Making the most out of my trust.
Hi Terry, I’m 75 in good health but my husband is 86 and has alzheimers. I just put our house in a Trust to protect myself if he has to go into a nursing home. We own property in Alaska worth about $300,00. and owe about $100,00. so we would clear about 200,00. if we sold it. We have a two flat building in Chicago that we owe about the same amount on. Would it be wise to sell the Alaska property then use the proceeds to pay off the Chicago property and then put the Chicago property into my Trust? My daughter lives in and pays rent on the building that is a block away from my house. My husband will go along with whatever I think is best. Thank you for any advice you can share,
Terry Says
Wait — you need a competent elder-law and estate plannign attorney in your state of residence to guide you through this. For example, you say you “put your house in a trust” — but was it an IRREVOCABLE Trust?? Or just a revocable living trust.
You don’t need to put your house into a trust to protect it — because a “community spouse” has the right to live in the family home in most states.
And if you “convey” real property within 5 years of him entering a nursing home and applying for Medicaid, they can look back and go after the money. Plus with those joint assets, you wouldn’t qualify for Medicaid anyway!
And if you sell your primary residence you get a $250,000 tax exemption on any gains — and $500,00 if you’re filing jointly. But if you own it at death, there will be no tax — since under current law, its value will “step up” to the value at the date of death!!
As to out of state property, that’s an entirely different story re the taxes etc. Gosh you are flying blind and have likely already made some expensive mistakes. STOP RIGHT NOW — stay away from whoever put that property into a trust. Talk to the trust department of your bank and find a competent lawyer (and tax person) to guide you specifically and correctly!!
