What do u know about Trusts / Elder care law

[Rob Base 2.0]

Talked with a family friend last night. Dude is OLD though.

He was discussing different finance things for my opinion. But my mom has NO money so I'm not up to speed on old people stuff

I know he does NOT have long term care insurance. A lawyer told him though that if he puts his money & property (he has 2 houses) in a trust that it will shield his assets if they have to put him in a facility. He said the assets have to have been in the trust for 5 years though (which kinda makes sense with the 5 year loook back thing ) but I'm not sure. --I couldn't find much on interwebz

Other thing- he doesn't get along well with one son & especially that son's wife. But hec wants to leave something for that son. So he wants to put $750k aside and basically try to have that give the "not liked son" $25 k a year for life. But the catch is if that son dies he does NOT want that wife to get anything. Can u set up a trust or something like that? Again I couldn't find info like that in interwebz.

Thanks all.

[swamp]

yes he can. go see a lawyer. this is not a DIY project.

[Deleted]

I agree with swamp (I should mention that she's a lawyer and I'm not).  I have a Revocable Living Trust that cost about $3,000 to set up.  You can certainly make provisions for adult children that vary for each one and prevent money going to certain people.  Not sure about the logistics of sheltering assets to qualify for a Medicaid nursing home.  To me, that's what my assets are for (and DS, bless him, agrees with me)- providing for my needs up till the last day, including nursing home care. 

[Rob Base 2.0]

Yeah, old dude has a lawyer. He been talking to him and the "good son" been going with him.

But old dude is not trusting of almost anyone & very paranoid and was just asking for my opinion / sounding board on some things.

Because the way he really wants to do it is hokey and will cause troubles IMO.

What he wants to do is give the $750k to "good son" to manage on behalf of "bad son" to try to give $25k a year to bad son (but kind of an off the record deal - so there are potential gift tax issues, potentially more bad blood between the sons, etc. )

When I mentioned making a trust for bad son, he said "but than I think his wife will get money if bad sin dies." I said I wasn't sure, but that it would not hurt to ask lawyer. All lawyer could do was say no...

[swamp]

Mar 27, 2017 7:59:57 GMT -5 @athena53 said:

I agree with swamp (I should mention that she's a lawyer and I'm not).  I have a Revocable Living Trust that cost about $3,000 to set up.  You can certainly make provisions for adult children that vary for each one and prevent money going to certain people.  Not sure about the logistics of sheltering assets to qualify for a Medicaid nursing home.  To me, that's what my assets are for (and DS, bless him, agrees with me)- providing for my needs up till the last day, including nursing home care. 

You need to make it an irrevocable trust and the trustor cannot be the trustee.

In English: If you set up a trust to avoid paying for nursing home care, you are no longer in charge of your own money. You have to put someone else in charge.

[swamp]

Mar 27, 2017 8:16:21 GMT -5 Rob Base 2.0 said:

Yeah, old dude has a lawyer. He been talking to him and the "good son" been going with him.

But old dude is not trusting of almost anyone & very paranoid and was just asking for my opinion / sounding board on some things.

Because the way he really wants to do it is hokey and will cause troubles IMO.

What he wants to do is give the $750k to "good son" to manage on behalf of "bad son" to try to give $25k a year to bad son (but kind of an off the record deal - so there are potential gift tax issues, potentially more bad blood between the sons, etc. )

When I mentioned making a trust for bad son, he said "but than I think his wife will get money if bad sin dies." I said I wasn't sure, but that it would not hurt to ask lawyer. All lawyer could do was say no...

No, she won't. She won't get anything unless she is a trust beneficiary.

[Rob Base 2.0]

Thanks for the info

[hoops902]

Mar 27, 2017 8:45:39 GMT -5 swamp said:

Mar 27, 2017 8:16:21 GMT -5 Rob Base 2.0 said:

Yeah, old dude has a lawyer. He been talking to him and the "good son" been going with him.

But old dude is not trusting of almost anyone & very paranoid and was just asking for my opinion / sounding board on some things.

Because the way he really wants to do it is hokey and will cause troubles IMO.

What he wants to do is give the $750k to "good son" to manage on behalf of "bad son" to try to give $25k a year to bad son (but kind of an off the record deal - so there are potential gift tax issues, potentially more bad blood between the sons, etc. )

When I mentioned making a trust for bad son, he said "but than I think his wife will get money if bad sin dies." I said I wasn't sure, but that it would not hurt to ask lawyer. All lawyer could do was say no...

No, she won't. She won't get anything unless she is a trust beneficiary.

This is exactly what my father is doing.  Not because he doesn't like my brother, but because my brother is poor with money and he hates my brother's wife (fortunately, my brother is poor with money in a way that he knows he's poor with money and simply avoids big sums).  There's 1 trust with the 2 of us as beneficiaries...if he dies, his kids take over his portion of it.  His wife gets nothing, which is going to be dramatic when my father dies, because my wife is getting something (not from the trust though). 

Short version:  You can set up a LOT of control within a trust whereby money isn't going to go to someone you don't want it to go to.  Swamp makes a great point about the trustor/trustee relationship for "hiding" funds...the government is smart enough to not let you hide the money and still control it...knowing that it's no real difference from you just having the money. 

[Deleted]

Mar 27, 2017 8:16:21 GMT -5 Rob Base 2.0 said:

What he wants to do is give the $750k to "good son" to manage on behalf of "bad son" to try to give $25k a year to bad son (but kind of an off the record deal - so there are potential gift tax issues, potentially more bad blood between the sons, etc. )

When I mentioned making a trust for bad son, he said "but than I think his wife will get money if bad son dies." I said I wasn't sure, but that it would not hurt to ask lawyer. All lawyer could do was say no...

This is exactly the kind of thing a trust could allow, including a provision for what happens to the funds if Bad Son dies (it goes to Bad Son's kids, or to charity, or just stays in the trust for Good Son to eventually spend).  Also perfectly OK to have one person manage the trust and had out funds to another beneficiary; my Trust has my brother, a CPA, as Trustee till my son is 35, at which point DS can also become a trustee.  DS is 32, a wonderful young man with a good wife and 2 beautiful children, but he has very little interest in managing money (or spending it, for that matter) and my main concern is that he might give large chunks of it to his church immediately.  My brother is also a devout Christian who has a healthy perspective on giving away vs. spending (he's on the waiting list for a Tesla and he owns 3 houses).  I'm hoping he'd be a good guide for DS.

It can cause friction, of course.  We set up the trust when DH was alive and our attorney asked  a lot of darn good questions about whether my brother and DH got along well, whether DS and DH got along well...the trust would have required them to take good care of DH, but I knew they'd do that. 

[Rob Base 2.0]

Thanks all