Trust Agreements can be very complex and each one is unique. This post generalizes how Realty Trusts are treated if you or a loved one needs care in a Nursing Home.
Realty Trust are often Nominee Trusts, which is a document designed for the primary purposes of; 1. avoiding probate upon death of the Grantor and; 2. shielding the identity of the Trust Beneficiaries on public documents. More often than not the Nominee Trust names a second Trust Agreement as the Beneficiary.
Since Massachusetts enacted M.G.L. Chapter 184 §35 and allowed A Trustee Certificate to be filed for the public as opposed to the whole trust, Nominee Trusts are used less frequently and the Realty Trust is the only underlying Trust agreement and names beneficiaries directly and not another Trust.
In either case, Masshealth will take a look at the underlying Trust to determine the following:
- Is the Trust Revocable or Irrevocable by the Grantor?
- If it is Revocable that means the Grantor (the person who created the Trust) can revoke, alter, or amend the Trust, and therefore, Masshealth will consider the Trust to be a countable asset and needed to be used for Nursing Home Care since the Grantor still retains control over the Trust.
- If it is Irrevocable, then it needs to pass a few tests before it would be considered a non-countable asset.
- Was it done 5 years before nursing home care is needed? The “5 Year Look Back” & Exceptions
- Does it allow the Grantor access to any Principal for any reason? if so then all Principal will be countable.
- Does it allow the Grantor access to any Income for any reason? if so then the income would be countable.
Bryan Woodford, Esq.