Advised to close an irrevocalbe trust: why?

[fishingdan]

What is the name of your state (only U.S. law)? Michigan

Sorry about the previous post without a question. Technical issues occurred.

Brief background:
- In Feb 2005, an irrevocable trust was created to preserve assets for my grandmother's when my grandfather entered a nursing home. My mother was defined as the trustee. My sister, mother and myself are defined as equal recipients of the trust's assets when my grandparents die.
- One annuity (~$175k) and one insurance policy (~$35k) were transferred to this trust. Another $150k in assets (CDs and savings accounts) remained in my grandmother's name.
- My grandfather died in spring of 2006.
- My mother died recently
- My grandmother is currently 87 and is in good health

Upon my mother's death, my grandmother setup a meeting with her attorney and invited my sister and myself. We took care of changes to my grandmother's power of attorney, medical proxy, her will and etc. We then started to discuss the trust and the lawyer advised us (my sister is now the trustee due to my mother's death) un-fund the trust and transfer these assets back to my grandmother's name. I have read the trust documents and I don't understand why this is necessary. We have another meeting with the lawyer on 8/8 and I'm hoping to learn somethings between now and then.

Any thoughts as to why this would be necessary?

Thanks,
Dan

 

[Dandy Don]

You should have been asking the attorney why he said what he said---we can't read his mind or ascertain his motives/

If grandfather is going to be possibly receiving Medicaid benefits at the nursing home, how the assets are titled is going to be a very important factor. He must take very special care to be able to prove that he is not hiding assets in someone else's name in order to qualify for government benefits or there might be very severe financial penalties. A certified estate planning professional can help you get the assets titled correctly and it must be a person who is familiar with the Medicaid rules and regulations regarding a person's financial assets..

DANDY DON IN OKLAHOMA ([email protected])