Rysso & Wingfield, PLLC

A "Sole Benefit Trust" is used when one spouse is in the nursing home and the other is still at home. A sole benefit can preserve all assets for the spouse at home, and obtain immediate Medicaid benfits for the spouse in the nursing home.

We draft the trust and advise the client on how to place assets into the trust. We also advise the trustee on how and when to make distributions. The assets may only be distributed to the spouse at home or for their benefit. Neither spouse is the trustee. This is why it works under the Medicaid program - the client and his or her spouse no longer control the assets and they cannot force a distribution.

Certain provisions of the trust must be irrevocable. (1) The trust assets must only be used for the spouse at home, (2) neither spouse can be the trustee, and (3) the trust assets must be distributed by the end of the spouse at home’s IRS-published life expectancy.

Any asset can be placed in the sole benefit trust, although there are tax consequences for IRA’s and other retirement plans. Conveniently, if there is a revocable living trust already in place, that trust can simply be restated and the client does not have to re-title assets already in the name of the trust.

There is really no negative to planning with sole benefit trusts unless there are very large retirement assets, such as IRAs, 401(k)s, and qualified annuities, that have not yet been taxed and would have to be cashed in and have the income tax paid. The only restriction is that there must be a couple and only one spouse must currently need long-term care.

Still have questions? Please contact us anytime! We look forward to hearing from you.

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