Special needs trust? How to hold a rental...

zanna3April 11, 2006

I'm not sure if this is the correct forum for this question; if not, please let me know. (I posted it on "household finances" as well.)

My adult daughter has a physical disability (similar to lupus or MS). She works and supports herself, except for medical expenses. Her monthly medical expenses are several times her income, and are covered in part by the Oregon Health Plan (OHP). To help her with the medical that isn't covered by OHP, I give her the income from a rental house I own.

I'd like to simplify this situation (and my accounting chores) by getting myself out of the loop. I'd love to just give the house to my daughter, but OHP would then consider the rent money as *income* to her, not assistance with medical bills as it is now.

I have arranged that after my death, a share of my assets will go into a special needs trust, the funds in which can then be used to help with her medical and not be considered income. But am I correct in understanding that this sort of trust can't work while I am alive? Is there something else I can do?

Thanks very much for any help.

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I wouldn't risk upsetting the present plan. What might work today, might be changed tomorrow and you wouldn't be able to go back and fix it. Anytime someone loses an eligibility, it's hard to get back. It's a tricky thing, but I can certainly understand your wish to make it easier for her. Talk to the attorney that drew up the trust. He may know of a way to get around it.

    Bookmark   April 12, 2006 at 8:25AM
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Yes, I agree that it would be hard to do this. Is there another family member who can be in this loop? But the attorney will know best, I am sure. Good luck, and let us know if the attorney has any other good ideas.

    Bookmark   April 12, 2006 at 9:55AM
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I would make sure that you talk to an attorney that really specializes in trusts. This might be a bit complicated for just a general practice attorney.

    Bookmark   April 13, 2006 at 8:10AM
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