Can You Sell Your House If It Legally Belongs To Your Irrevocable Trust?
Protecting your assets from creditor claims from Medicaid during probate is one of the most common and most practical reasons to establish a trust. If you have missed the boat on eligibility for long-term care insurance, then unless you are fabulously wealthy, there is a strong possibility that, one day, you will need to rely on Medicaid to pay for your nursing home care. Most people avoid this problem by selling their houses when they enter a nursing home; the proceeds enable them to pay for as many years of care as they need. What if you want to keep your house so that your children can inherit it? If you place your house in a trust, it will not become part of your estate, so creditors cannot petition the court to order you to sell it to pay debts. With Medicaid’s five-year lookback rule, this means that the trust must be an irrevocable trust, and you must transfer your house to the trust at least five years before you apply for Medicaid long-term care benefits. It is not too soon to establish a trust and transfer your house to it if you want to ensure that your children will be able to inherit it, so contact an Orlando estate planning lawyer.
What Happens When an Irrevocable Trust Sells One of Its Assets?
A Floridian woman named Lisa recently wrote a letter to the Moneywise advice column asking about what to do when she planned carefully for her long-term care, but the plans later changed. Like many middle-class couples, Lisa and her husband own their house, but their retirement savings are not enough to pay for long-term care for both spouses without selling their house. They want their sons to inherit the house, so when they were in their early 60s, they established an irrevocable trust and transferred the house to it. They listed their sons as the trustees.
Now that both spouses have retired, Lisa and her husband want to sell their house and move to a less expensive one. Since the house belongs to the trust, this means that the trust must sell the old house, and it will get the proceeds; it can then use this money to buy a new house. Legally, the trustees must handle all the paperwork and transactions associated with the sale. They can only embark on this process with the written consent of the beneficiaries, who are Lisa and her husband.
Despite the face value meaning of the word “irrevocable,” irrevocable trusts can buy and sell property. The grantor cannot do this on behalf of the trust, though, unlike the grantors of revocable trusts. Instead, the beneficiaries must sign off on the transactions. The only other way to authorize the transactions is for the grantor or another interested party to go to court and request a court order requiring the trust to move forward with the sale.
Contact Gierach and Gierach About Irrevocable Trusts
An estate planning lawyer can help you work around the restrictions imposed by irrevocable trusts. Contact Gierach and Gierach, P.A. in Orlando, Florida to discuss your case.
Source:
msn.com/en-us/money/realestate/i-put-my-1-1m-home-in-an-irrevocable-trust-with-my-sons-as-beneficiaries-and-i-now-want-to-sell-it-but-am-i-forced-to-buy-a-house-of-equal-value/ar-AA1S9YyV?ocid=msedgntp&pc=ACTS&cvid=693afb27d2fe420ba7035a5540352aac&ei=14
