Outcome Summary

The support property is already held in an existing protective trust. Any "no trust" scenario requires:

• Formal restructuring of the existing trust — the same legal work already required by the protected path
• or leaving the support property in fragmented protection while moving other assets, which defeats the planning objective
• or moving the support property into an exposed personal holding pattern, which defeats the original protection purpose

None of these are clean. This scenario is shown for comparison only — the protected scenarios are the only viable paths because they reuse work the support property already requires.

In prior sweeps, 20%-down scenarios have failed to satisfy the private-pay window because the support-property mortgage drag depletes the IRA before the protection window activates. The support trust may be insolvent in late projection years. Strongly recommend 80% or 100% down.

• • 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: Cash-out refinance: $90k primary house IO — $20k deferred maintenance, $10k SNT seed, $60k SNT condo down payment
• • Spring 2026: SNT purchases condo for $300k w/ closing costs, placing $60k down (20%), remaining $240k condo mortgage (80% 30yr P&I)
• • 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 $36k/yr gross rental income
• • 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
• • 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) —