Michigan Medicaid Planning Tip | SBO Trust

There are many tools in the Michigan Medicaid planner’s tool box when assisting elder law clients. One of those tools is the SBO Trust (“Soley for the Benefit of” Trust).

For purposes of Michigan Medicaid planning, the SBO Trust is an irrevocable trust that holds assets entirely for the benefit of another. The assets are held for the benefit of the community, non-Medicaid applicant, spouse. Through this type of planning assets which would have been considered countable by Medicaid, now become unavailable. This allows the Medicaid applicant to qualify sooner for Medicaid and defray the Michigan nursing home costs, which can be well over $6000.00 per year.

There are certain requirements for the SBO Trust. For example it must be irrevocable, in writing and established after the admission to a nursing home by the Medicaid Applicant, and must distribute an annuitized portion of trust corpus to the community spouse on an actuarial sound annual basis.

The Michigan SBO Trust is just one Michigan Medicaid planning technique in an elder law lawyer’s tool box.

Christopher J. Berry, Esq., A Bloomfield Hills Elder Law Attorney, is a Partner with Witzke Berry PLLC, which practices in the areas of Estate Planning, Michigan Long-term Care Planning, and Michigan Medicaid Planning.