Trust Ryan Braun February 19, 2022
HOUSING OPTIONSTRUST
Parent places property in a trust for use by the family member with a disability

Parents can set up a separate trust for specific purpose of holding the property (home) along with sufficient resources or assets that are readily available to cover property upkeep, such as repairs and maintenance of the property (home).

Low Risk

Liability Risk

High Risk

Much Control

Day-to-Day Control of Property

Little Control

Much Control

Long-Term Control of Asset

Little Control

Flexible

Flexibility to Move

Limited Flexibility

What is this?

Parents can set up a separate trust for the specific purpose of holding the property (home) along with sufficient resources or assets that are readily available to cover property upkeep, such as repairs and maintenance of the property (home). The parent(s) can purchase a second home and place it in a trust, or the parent(s) can leave the family home to the trust upon their death. Seek the counsel of an attorney who is experienced in trusts, Medicaid, and Social Security. (see list attorneys: Attorneys with an interest in Estate Planning)

Establishing a separate trust for the property (home):

    • allows for the preservation of the property (home) for the benefit of the family member with a disability after the death of the parent(s).
    • gives the parent(s) control over the manner in which the trust and property (home) are maintained.
    • provides the parent(s) the opportunity to outline specific conditions, such as the conditions under which the family member with a disability can move from the home.
    • provides the parent(s) the chance to stipulate who becomes the beneficiary of the assets/home after the home is no longer in use by the family member with a disability.
    • requires the parent(s) to name a trustee to oversee the trust. The trustee will need to make provisions for the day-to-day management of the property after the parent(s) are deceased.

Property that is owned by a trust does not eliminate the SSI requirement that a family member with a disability must pay fair share rent. If a family member with a disability receives SSI, they may be required to pay a fair share rent for living in the house owned by the trust. 

The parent(s) should investigate establishing a separate trust to hold the property (home) and assets for upkeep based on their particular family situation and upon advice of competent legal counsel. It may be ill-advised to have a single trust to hold the property and provide financial resources for the family member with a disability. 

If a family member with a disability does not receive SSI but receives SSDAC (SSDI), they are NOT required to pay a fair share rent for living in the home owned by the trust and a second trust may not be necessary. (See Information and Resources for more information)  

View stories of families who have established trusts to hold the property:

The Brown Family

The Molloy Family

What Circumstances Make this a Possible Fit?

    • The parent(s) owns a property (home) and wants their family member with a disability to live in the home after they die. This property (home) could be the family home, or another property (home) that the family has purchased.
    • The parent(s) also has assets for property upkeep that they can put in the trust. 
    • The parent(s) wants to be able to preserve the property (home) and assets for the benefit of other family members (e.g. siblings of the family member with a disability) once it is no longer being used by the family member with a disability.

What Does This Mean to My Family Member with a Disability?

Placing the property (home) in a trust provides the continuity of use of the home for the family member with a disability.  A properly worded trust outlines steps to take if the home can no longer meet the needs of the family member with a disability due to his/her deteriorating health or deteriorating conditions in the neighborhood.

What Does this Mean to My Estate?

This will provide for fast transfer of assets from the estate of the deceased parent(s) to the trust for the benefit of the family member with a disability.

Where Do I Get More Information?

    • If the parent(s) is over age 60, ProSeniors, Inc. may be able to offer limited free legal advice: 800-488-6070.
    • The Community Fund Management Foundation offers pooled trusts and has tools to assist in decision-making about the proper setup of trust funds to accomplish specific goals. They can be reached at 513-967-5612.  CFMF is a free initial resource for parent(s) who have questions about trusts.

Pros

Cons

Pros and Cons

Extent of Control

Effects on Public Benefits

Longevity

Property Management Responsibility

Financial Considerations

Long Term Flexibility

Tax Issue

Created by a Home Think Tank workgroup. 

Information on this sheet is provided for informational purposes only. Nothing in this document should be considered legal or accounting advice. Contact a professional for information pertinent to your specific situation.

© 2022 Hamilton County Developmental Disabilities Services

This document may be reproduced and distributed without modification.