Outcome Summary

• • Spring 2026: Petition to restructure the existing irrevocable trust holding the support property (court-approved modification process, ~2–4 months). The support household is the current beneficiary and consents. The designated fiduciary prepares to assume protection-trust administration.
• • Spring 2026: Attorney decision: refi-bridge to buy the protected condo BEFORE the support-property sale clears, or wait? Buying first requires a primary house refi as a short-lived bridge (extra closing costs ~$5–10k) but avoids the summer market spike on the protected condo. Buying after avoids the refi but exposes the household to seasonal price movement on the target condo.
• • Spring 2026: Establish 3rd party Special Needs Trust (SNT) for the dependent household, with the fiduciary serving as trustee until the primary household's passing
• • Spring 2026: support property sold (~$404k). Proceeds move into the protection trust. Trust funds: $256k SNT condo down payment, $10k SNT seed (MAPT → SNT gift)
• • Spring 2026: SNT purchases condo for $320k w/ closing costs, placing $256k down (80%), remaining $64k condo mortgage (20% 30yr P&I). No primary house refinance.
• • Late spring 2026: Primary house placed in the protection trust to shield from estate recovery exposure, fiduciary appointed as trustee
• • Summer 2026: support household moves out of the support property and in with the primary household as live-in caregiver (beginning the long residency period used by this plan)
• • Summer 2026: dependent household + family move into the protected condo — load-bearing housing solution for the dependent household (benefits remain protected by the special-needs trust structure)
• • Summer 2026: Document the support household's $404k equity claim from the support-property sale (or rental valuation) — signed acknowledgment by the fiduciary and both households for later estate-settlement repayment (tracked in the equity ledger)
• • Late summer 2026: support property rented out for $28k/yr — rental income flows to trust (not the primary household's taxable income)
• • Condo sold upfront instead — no rental income stream
• • As nursing needs intensify, begin searching for a memory care facility that guarantees (in writing) a Medicaid bed after 2–3 years of private pay
• • 2034: primary household enters memory care facility — private-pay window begins
• • 2034: support household takes roommate(s) — $1k/mo additional protection-trust income to help cover house expenses
• • 2037: Pre-Medicaid IRA liquidation — all remaining IRA & annuities liquidated into the SNT BEFORE Medicaid application (~$159k tax withholding), protecting these funds from Medicaid seizure so they can maintain the primary house and cover trust obligations
• • 2037: Pay off remaining SNT condo mortgage (if any), then file Medicaid application; lookback period (5 years from 2026 transfers) cleared in 2031
• • 2040 (primary household's death): Stepped-up basis on primary house and any remaining trust assets via §2041 LPOA → §1014 — eliminates accumulated capital gains
• • 2040: Sell primary house at stepped-up basis (~$1.6M projected proceeds, $0 capital gains)
• • 2040: Pay projected estate tax (~$118k on a ~$2.1M estate)
• • 2040: Repay the support household's documented $404k equity claim from house sale proceeds (legally enforceable per Summer 2026 acknowledgment)
• • 2040: Distribute remaining protection-trust assets in equal thirds to the fiduciary, dependent household, and support household — the dependent household's share is offset by trust inheritance to maintain even allocation
• • Planning horizon through 2040 (primary household age 84) —