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

zanna3April 10, 2006

I'm not sure if this is the correct forum for this question; if not, please let me know.

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 your help.

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In all sincerity, I would suggest you speak to an attorney familiar with trusts and not go on the advice of anyone on a web forum.

    Bookmark   April 14, 2006 at 12:50AM
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You're going to need a lawyer. Most lawyers will give you a free or low-cost initial consulation.

The laws on these trusts vary from state to state, but usually they can be set up while the parents are alive. My brother has one for his six-year old son.

The chief problem with the trust is that your daughter may have an earning cap--she will only be able to make a certain amount of money if she also has the trust. Again, you will need to see a lawyer about this.

    Bookmark   April 14, 2006 at 11:39PM
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