What steps should my father-in-law take to create a family trust in Mississippi?

Full question:

My father-in-law lives in Mississippi. He is wanting to deed all of his assets and property into a family trust. His main two goals are:1. To protect his estate for his three adult children (with his oldest daughter as trustee) 2. Have all of his assets out of his name in the event he becomes ill (he is 87 years old) so he may qualify for Medicaid benefits later in his life. We are told there is a three or five year look-back period for purposes of qualifying for nursing home Medicaid benefits. What forms do you recommend?

• Category: Medicaid
• Date: 04/07/2025
• State: Alabama

Answer:

To qualify for government nursing home assistance, there is a sixty-month look-back period. During this time, the state reviews any asset transfers made for less than fair market value or into a trust to determine eligibility for Medicaid. Transferring or giving away assets can be considered a "disposal of resources." Under the Deficit Reduction Act of 2005, this five-year look-back applies to transfers made on or after February 8, 2006. For every four thousand three hundred dollars disposed of, there is a one-month disqualification from Medicaid coverage for nursing home care.

The penalty period for these transfers starts on the later of: the first day of the month after the assets are transferred or the date the individual is eligible for Medicaid long-term care. If multiple transfers occur, the second penalty period does not begin until the first one ends. The length of disqualification depends on the value of the resources transferred.

Some transfers do not affect Medicaid eligibility, such as transferring a house to a spouse, a child under twenty-one, a disabled child, a sibling with equity interest who lived in the home for at least one year before institutionalization, or a caretaker child who provided care for at least two years prior. If a person's equity interest in the home is five hundred thousand dollars or less (or seven hundred fifty thousand dollars in some cases) and they intend to return home, it will not count as a resource for Medicaid eligibility.

Creating a life estate without the power to sell may disqualify an individual from Medicaid. However, if a life estate deed with the power to sell is created, it is not considered a disposal because the individual can sell the house without permission. The house could still be counted as a resource unless exempt for other reasons, such as a spouse or dependent relative living there.

We can help you find the necessary forms or draft any additional forms you may need. However, we cannot recommend one specific form over another for the same matter. You can explore available forms to see if they meet your needs. If they don't, please let us know, and we may be able to add a form for you.