Decision Timeline: When to Act, When to Wait, When to Call the Attorney
For Trustee | April 2026
Table of Contents
- Urgent: Spring 2026 — MAPT, SNT, trust restructure, sell condo, buy condo
- Important: Summer-Fall 2026 — A support sibling moves in, document equity, roommate setup
- Can Defer: 2028-2033 — Optimizer, facility search, LTC trigger
- Critical: Medicaid Transition ~2037 — IRA liquidation, Medicaid application
- After Medicaid: 2037-death — House carrying costs, tax filings
- At Death: Estate Settlement — Sell house, distribute, RMDs if early death
- Attorney Engagement Summary — Three visits over 15 years
How to Read This Document
Decisions are grouped by urgency. Each one lists:
- What the decision is
- Why now or why it can wait
- What's at stake in dollars or risk
- Attorney needed? and what to bring
Urgent: Spring 2026
These decisions start the clock on the court process and downstream purchases. Every month of delay compresses the margin for completing C2's condo purchase before the school year.
Form the MAPT and transfer the primary house
- Why now: The 5-year Medicaid lookback starts at transfer. Formation in 2026 clears the lookback by 2031, with Medicaid projected ~2037 — ample margin. The urgency is the court process: it gates everything downstream.
- What is a MAPT? A Medicaid Asset Protection Trust is an irrevocable trust that moves assets out of Person A's probate estate. After Person A's death, Oregon's Medicaid Estate Recovery Program (MERP) can — and aggressively does — place liens on any assets remaining in the probate estate to recoup the cost of care. Oregon is one of the more aggressive states for MERP recovery. Assets inside the MAPT are outside probate and beyond MERP's reach, provided the 5-year lookback period has elapsed before Medicaid is applied for.
- At stake: The house (~$825k, appreciating to ~$1.6M). At $15-20k/mo (after decoupled inflation) in memory care over 3-4 years, MERP liens could reach $540-960k — potentially the entire house.
- Attorney needed: Yes. Bring:
- Person A's property deed
- Current mortgage information (if any)
- List of all Person A's assets (IRA, annuities, bank accounts, real estate)
- Person A's existing estate planning documents (will, POA, advance directive)
- This document and the strategic plan report
- The attorney drafts the MAPT with LPOA (critical for stepped-up basis)
Form the SNT
- Why now: Must exist before the SNT condo purchase. Same attorney visit as the MAPT.
- At stake: C2's housing and SSA compliance. Without the SNT, buying C2 an SNT condo could count as support in kind, affecting benefits.
- Attorney needed: Yes, same visit. Bring:
- C2's SSDI benefit verification letter
- C2's current income and asset information
- Desired SNT condo purchase price and down payment plan
Restructure the existing irrevocable trust into the MAPT
- Why now: The legacy condo must stay in trust protection throughout — it never touches an individual beneficiary's name. The attorney will advise whether the existing trust can sell the legacy condo before restructuring (simpler, cash transfers to MAPT) or whether the restructure must happen first (legacy condo transfers trust-to-trust, then MAPT sells it). Either way, court proceedings take time.
- At stake: $404k in legacy condo value. If the legacy condo enters an individual beneficiary's name, even briefly, creditors can attach.
- Important: Oregon has no trust decanting statute. Restructuring an irrevocable trust requires judicial modification under ORS 130.200 — a court petition with consent of the settlor (Person A) and all beneficiaries. This means a judge and a hearing. The attorney files the petition, all parties consent, and the court approves the modification. The legacy condo stays in trust throughout — it never enters an individual beneficiary's personal name.
- Attorney needed: Yes, same visit. Bring:
- The existing irrevocable trust document
- Information about beneficiary creditor exposure
- The attorney prepares the ORS 130.200 petition
Sell the legacy condo (after restructuring into MAPT)
- Why now: Once in the MAPT, the trustee (C1) sells the legacy condo. Proceeds fund the SNT condo purchase and MAPT checking. Delaying the sale delays the entire downstream plan.
- At stake: $82k net difference between selling and renting over 15 years. Plus: rental path means two properties to manage, IO mortgage, management fees, and MAPT near-insolvency.
- Attorney needed: No — this is a real estate transaction, not a legal one. C1 executes as MAPT trustee. Use a real estate agent.
- Can defer? No. The SNT condo purchase depends on these proceeds.
Purchase SNT condo at 80% down
- Why now: C2 needs housing. The SNT condo purchase price and down payment determine the mortgage burden on Person A's IRA for the next decade. Portland condo prices typically run 5-10% higher in peak summer months — buying before the seasonal surge on a $350k SNT condo could save $17-35k.
- At stake: At 80% down on $350k: $45k interest, both trusts solvent. At 20% down: $166k interest, SNT insolvent, possible Medicaid bed guarantee violation. At $320k purchase price with 80% down: zero cross-trust transfers ever needed.
- Attorney needed: No — real estate transaction. The trustee purchases on behalf of the SNT.
- Negotiate hard on price. Every $10k off the purchase price adds ~$8k to MAPT cash and reduces lifetime interest.
- If the court timeline slips past summer: A bridge refi on the primary house ($18-25k in fees and short-term interest) can fund the purchase immediately. The refi is paid off from sale proceeds when they become available. The cost may be offset by avoiding peak seasonal pricing.
Important: Summer-Fall 2026 (after court approval)
These follow the spring actions. The court process (2-4 months) determines when they can begin.
A support sibling moves into primary house
- Why now: After MAPT formation and condo sale. The support sibling gave up their housing for this plan and needs housing.
- At stake: Nothing financial. This is a logistics decision.
- Attorney needed: No.
Document the $404k equity claim
- Why now: While the transaction is fresh and all parties agree on the number.
- At stake: The documented $404k capital recovery at estate settlement. Without documentation, it becomes he-said-she-said.
- Attorney needed: Optional but recommended. A signed acknowledgment by all three siblings is sufficient. The attorney can include it in the trust documents.
Set up roommate arrangement (deferred until memory care)
- Why it can wait: Roommate income ($1,100/mo) only matters after Person A enters memory care (~2034) and is no longer living in the house. No rush.
- At stake: $92k over the post-MC years. Helps MAPT cover carrying costs.
- Attorney needed: No. Standard rental agreement.
Can Defer: 2028-2033
These decisions arise naturally as circumstances develop. No action needed now.
Withdrawal optimizer activation (2028)
- Why it can wait: RMDs don't start until Person A turns 73 (2028). The optimizer runs automatically in BurnRate.
- What to do: Review the BurnRate projection annually. The optimizer shows how much to withdraw from IRA vs LTC savings each year to minimize tax.
- At stake: ~$5k lifetime tax savings. More importantly, solvency — preserving IRA for the SNT.
- Attorney needed: No. This is a financial/tax decision. Consult the CPA at tax time.
Memory care facility search (~2031)
- Why it can wait: Person A's MCI may progress slowly. The search window is ~3 years before anticipated memory care (projected 2034).
- What to do: Visit facilities, ask about Medicaid bed guarantees, get 3-year private pay contracts in writing.
- At stake: Primary Goal #1 — Person A's quality of care. A facility chosen in crisis is a facility chosen badly. Transfer trauma accelerates cognitive decline.
- Attorney needed: No, but bring the attorney into contract review if the facility's Medicaid bed guarantee language is vague.
LTC insurance trigger (2028-2034)
- Why it can wait: The LTC policy triggers when Person A needs qualifying care. This isn't a decision — it's an event.
- What to do: File the claim when the time comes. Payouts flow to LTC savings.
- Attorney needed: No. Insurance company handles it.
Critical: At the Medicaid Transition (~2037)
This is the most consequential moment in the entire plan. Get it right.
Liquidate IRA and surrender annuities into SNT
- Why then: Must happen BEFORE the Medicaid application is filed. Once Medicaid is active, all income in Person A's name is seized.
- At stake: $300k+ in IRA/annuity value. If not liquidated, Medicaid takes it as patient pay for the life of each contract.
- Cost: ~$159k in tax withholding. This is the price of protecting $300k+.
- Attorney needed: Yes. The attorney coordinates timing:
- Liquidate IRA and annuities (C1 executes)
- Deposit proceeds to SNT (after withholding)
- Pay off any remaining condo mortgage from SNT
- THEN file Medicaid application
- The order matters. Reversing steps 2 and 4 loses everything.
File Medicaid application
- Why then: After liquidation is complete and lookback is clear.
- Attorney needed: Yes. The elder law attorney should prepare or review the application. Bring:
- All trust documents
- 5 years of financial records
- Proof of asset transfers and dates
- Current account balances (should be near zero in Person A's name)
- Memory care facility contract with Medicaid bed guarantee
After Medicaid: Maintenance Mode (2037-death)
SNT pays house carrying costs if MAPT runs low
- Why it can wait until needed: At 80% down, MAPT covers its own costs for 14 of 15 years. SNT backup is minimal (~$11k in the final year).
- At stake: Liens on the house if taxes/insurance lapse. Diminishes everyone's inheritance.
- Attorney needed: No. C1 executes as trustee. Document each transfer.
Annual tax filings
- Ongoing: Person A's 1040 (MAPT grantor trust income), SNT 1041/OR-41
- Attorney needed: No. CPA handles this.
At Person A's Death: Estate Settlement
Sell the house
- Stepped-up basis via LPOA: $0 capital gains on ~$1.2M appreciation. Tax savings: ~$348k.
- Oregon estate tax: ~$118k on ~$2.1M estate.
- Attorney needed: Yes. The attorney oversees trust termination and distribution.
Distribute per equity ledger
- Repay the documented $404k equity claim
- Divide remainder in equal thirds
- C2's third offset by SNT assets already received
- Attorney needed: Yes, same engagement as house sale. Bring the equity ledger.
If Person A dies BEFORE Medicaid trigger
- IRA/annuities pass to named beneficiaries via 10-year RMD (SECURE Act)
- Individual beneficiaries owe income tax on inherited-account RMDs at their marginal rates
- C2's share directed to SNT
- Inheritance is perfectly equitable at any appreciation rate — no exceptions
- Attorney needed: For trust termination and estate settlement, yes.
Attorney Engagement Summary
| When | What to Bring | Purpose |
|---|---|---|
| Spring 2026 (ASAP) | Asset list, deeds, existing trust doc, C2 SSDI letter, creditor-exposure notes, this plan | Form MAPT + SNT, restructure existing trust (ORS 130.200), draft LPOA |
| ~2037 (Medicaid) | 5yr financial records, trust docs, facility contract, current balances | Coordinate liquidation timing, file Medicaid application |
| At death | Trust documents, equity ledger, house appraisal | Sell house, pay estate tax, distribute per trust terms |
Three attorney engagements over 15 years. Everything in between is C1 executing as trustee with CPA support at tax time.
Companion documents: Executive Summary | Trustee Cheat Sheet | Strategic Plan