Legal Question in Wills and Trusts in New Jersey

Re: How Is Attorney Paid for Acting As Trustee?

More information is needed to give you a proper answer. Simply, the first $250,000 of profit on the sale of your residence is not subject to tax. You do not say what the house cost you, what improvements and costs you made over the years and its current market value. These numbers are necessary to properly advise you. Unless you need Medicaid (nursing home) planning, a trust may not be necessary, and you can deal with your children directly. An attorney as trustee could cost several thousand dollars a year. I suggest you speak with someone, like myself or another elder law and tax attorney familiar with Medicaid and taxes, who is familar with these matters before doing anything.

Re: How Is Attorney Paid for Acting As Trustee?

Be VERY careful. Although some rules vary from state to state, if you sell your house within 3 years of applying, you will be INELIGIBLE for medicaid benefits for live-in nursing home care for a period of time based upon the monthly allowance in your state. FOR EXAMPLE ONLY: if you receive $200,000.00 from the sale of your house and the Medicaid allowance in your state is $5,000.00 per month, divide $5,000.00 into $200,000.00 and you determine your period of ineligibility to be 40 months. However, Medicaid has a maximum of 36 months exclusion so if you sold for $100,000.00 it would be 20 months but only only 36 months if you sold for $200,000.00.

Putting the property in trust can cause the ineligibility period to be extended to 5 years.

I strongly suggest you consult with an attorney who has expertise in this area of the law because it can be very tricky and you stand to lose a lot if things aren't done the right way. Good luck.