My sister and I have been jointly appointed as both Guardian and Trustee of our mom's person and estate. Mom is now in assisted care due to dementia. She is 88 and otherwise in good health. Her assets are in a trust account that she and Dad set up years ago before his death. She not in danger of running out of money anytime soon. We have siblings who could use financial help and are requesting distributions from mom's trust. One of the in-laws, (or perhaps outlaw), has suggested removing her from her "revocable" trust in order to put her on Medicaid, moving her to an AL facility that accepts medicaid in order to greatly reduce her expenses, and distributing the max sum allowed tax-free to each sibling every year from her trust account. His lawyer says the distributions can be legally done. My lawyer says there's a conflict of interest with my sister and I being Mom's guardians, vowing in court to act on her behalf to protect and provide for her, and then using our position as trustees to begin distributing her assets before she's deceased - even before she's sick. Wording in the trust document provides for changes to the account only such as that will benefit the trust beneficiaries: the four siblings AND Mom since she is still alive. This issue seems to be coming dreadfully close to fracturing the family.
I bet your parents were frugal and saved every dime they could, my parents were the same way. I wouldn't even dream of touching any of my parents money for myself while they were still alive.
I cannot believe that one relative wanted to remove Mom from her own trust and have the money distributed before she had even passed. Sorry that won't work with Medicaid and the 5 year financial look back. There might be exceptions as each State has different requirements and programs.
Medicaid would see that money passed to relatives and would brand it as "gifts", thus Medicaid would subtract those $$$ amounts from your Mother's care. Mom would then need to pay out of pocket, but oops, there isn't enough money left for her to do that. Now what? Someone would then need to take Mom to their house and care for her until she was eligible for Medicaid. Depending on how much was removed from the Trust, it could take a few years.
It's terrible and so very common how money can tear a family apart.
Really, on top,of everything else...you and Sis would leave yourselves open to elder abuse too. (Taking advantage of elders financially is elder abuse.....)
I would not go along with it. Moral and ethical aside...there is also criminal issues. Doing what is proposed would be a breach of the fiduciary responsibility...just say no.
Put dear old mum in a cut rate joint to save money so family members can cash in early. I would rather suffer the rath of the "needy" family members. Let em yell. Don't do this.
Second, for the record, your mother cannot be "removed" from the trust. She's not a beneficiary, she's a grantor of assets allocated for and eventually transferred to heirs and beneficiaries named in the pour-over will and trust.
I honestly can't even comprehend the audacity, selfishness and greediness of the in-law who made that suggestion (request?). It literally "blows my mind!"
Fourth, even if annual payouts are provided for in the Trust, ALL the conditions must be met before these payouts can be made and payouts must be made in strict accordance with those Trust terms.
Fifth, as Trustee, you would be in flagrant violation and abuse of your mother's intents and wishes, and of the Trust. Those are grounds for legal action by the heirs/beneficiaries. While I don't have as much insight into guardianship, I would think it's grounds for breach of your duties in that position. The judge who appointed you would have grounds to remove you from your position.
Sixth, not having read the Trust, I still question advice of the attorney who said it can be legally done, but the real issue is exactly how those allocations are addressed in the Trust and on what the distribution depends (i.e., are they annual distributions during her lifetime or only after her death?)
Seventh, if the family is fractured, that's unfortunate, but your obligation is to your mother now and the beneficiaries later (unless the trust specifically provides for annual payouts during your mother's lifetime).
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