If House is Placed in Irrevocable Trust, will Line of Credit be Countable by Medicaid?

 In Long-Term Care Planning

Question:

If property has a line of credit from a reverse mortgage available before being placed in an irrevocable trust, can Medicaid consider the line of credit as a countable asset while in the trust?

Photo by Precondo CA on Unsplash

Response:

No, but it’s probably an unworkable strategy for a couple of reasons. First, transferring the house to the trust probably violates the terms of the reverse mortgage, possibly triggering the repayment of the mortgage. Second, for the trust to work in terms of Medicaid protection, the reverse mortgage funds must be made inaccessible to the homeowner, which would seem to contradict the purpose of getting the reverse mortgage in the first place.

Related Articles:

Can I Take Out a Mortgage on a Home in a Trust?

Can We Protect House Under Reverse Mortgage from Medicaid Estate Recovery?

How Can My Parents Borrow Against House in Irrevocable Trust?

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