Buying a Home for a Person with Disabilities
1. Trust Purchases Home.
An advantage is that the trust has sufficient liquid assets to pay for the home. A disadvantage of the trust owning the home is that, upon David’s death, the home will have to be sold to repay Medicaid for medical assistance rendered to David. Another disadvantage is that other family members must pay their pro rata share of the operating expenses or some rent because the trust must be “for the sole benefit of” the disabled beneficiary.
2. Beneficiary Owns Home.
The advantage is that the home will not be subject to the payback provision of the trust. However, it may still be subject to Medicaid estate recovery on the death of the beneficiary. State law must be consulted. The disadvantage is that, if the beneficiary is a spendthrift, he may mortgage the home, fail to maintain homeowner’s insurance, or may fail to pay real estate taxes or other expenses. An incompetent or minor person should not own a home.
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