Drafting Income-Only Trusts: Maximizing Medicaid Eligibility, Optimizing Tax Planning

Description

As the American population ages, many families struggle with planning for long-term care. An income-only trust is an important tool to have for counsel to elderly clients. This option can fulfill the nursing care and tax planning needs of clients whose assets would disqualify them from Medicaid, but don’t have sufficient assets or income to pay for their long-term expenses, such as home health aides or nursing home care. An income-only trust can protect assets, while still allowing the client to enjoy the use of the income generated from the trust assets.

Elder law counsel must be able to balance the intricacies involved in drafting and implementing the income-only trust with the precise Medicaid requirements to include the look-back periods.

Income-only trusts must be drafted carefully to preserve a client’s tax benefits. Counsel will learn essential techniques such as structuring the trust as a grantor trust to maximize income tax treatment and preserve tax benefits such as property tax discounts and the all-important step-up in basis.

Listen as our distinguished panel guides counsel to effectively structure income-only trusts for purposes of long-term care and tax planning. Specifically, the panel will provide techniques on how to use income-only trusts to maximize Medicaid eligibility and structure it as a grantor trust for tax benefits.