Can a trustee distribute assets of an irrevocable trust to the grantors
2 attorney answers
Irrevocable Trusts can be a great way to prevent your assets from being counted for Medicaid purposes down the road if one or both of you need Medicaid coverage for nursing home care. Five years needs to go by from the date of funding the Irrevocable Trust to the time you need Medicaid coverage in order for the assets and transfers to be disregarded. You need to meet with an experienced Elder Law Attorney in your area. This is a serious decision that requires a comprehensive review of your income, assets, expenses, health, etc. And NO, the trustee absolutely may not distribute assets to the grantors of an Irrevocable Trust in order for the trust to work. Income can be distributed to the grantors, but some attorneys prefer to draft the Irrev Trust to disallow income too. It depends on your needs and all of the specific facts of your case. The lifetime beneficiary of the trust may receive distributions from the Irrev Trust. The lifetime beneficiary may give you a gift if they so desire, but they are not required to. If you do an Irrev Trust, you do not (and should not) transfer all of your assets into. Only those that you do not need for your daily needs or in an emergency. If you have no interest whatsoever in or need for Medicaid planning, than an Irrevocable Trust probably isn't for you.