Understanding the Difference Between Irrevocable Trusts for Medicaid and VA Pension Planning

Description

Topics Covered:

Veterans Asset Protection Trust

1. Divest veteran of assets to qualify for benefits
2. Avoid reporting trust income on Veteran’s return
3. Preserve IRC 121 exclusion of gain
4. Qualify for IRC 1014 basis adjustment
5. Summary of solutions
   1. Gift taxes
   2. Grantor trust rules
   3. Completed gift v. estate inclusion
   4. Retain testamentary LPOA and avoid grantor trust status

Medicaid Asset Protection Trust

1. Divest grantor of assets to start 5-year lookback
2. Have grantor report trust income
3. Preserve IRC 121 exclusion of gain
4. Qualify for IRC 1014 basis adjustment
5. Summary of solutions
   1. File a gift tax return
   2. Ensure grantor trust status (incl. residence)
   3. Retain testamentary LPOA

**ElderCounsel Members – This recording is available FREE in the Learning Center > Video Library