Trustee Cheat Sheet
MAPT Trustee Duties
Ongoing (yearly):
- File Form 1041 / OR-41 (reporting only -- income flows to Person A's 1040 as grantor trust)
- Pay property taxes, insurance, maintenance on primary house from MAPT checking
- Keep records of all MAPT transactions
- Do NOT commingle MAPT funds with personal or SNT funds
At Memory Care (~2034):
- Ensure facility has Medicaid bed guarantee in writing (3 years private pay)
- MAPT checking covers house carrying costs (~$26-32k/yr)
- If roommate enabled, deposit roommate income to MAPT
At Medicaid Trigger (~2037):
- BEFORE filing application: liquidate all IRA + surrender annuities
- Deposit proceeds to SNT (after tax withholding)
- File Medicaid application after liquidation is complete
- Lookback must be clear (5 years from trust formation)
After Person A's Death:
- Sell primary house (stepped-up basis via LPOA -- $0 capital gains)
- Pay Oregon estate tax (~10-10.5% on estate over $1M)
- Distribute per equity ledger: repay the documented $404k equity, divide remainder in thirds, offset C2's share by SNT assets
SNT Trustee Duties
Ongoing (yearly):
- File separate 1041 / OR-41 for SNT (this IS a separate tax entity, unlike the MAPT)
- Manage SNT checking account
- Distribute only for C2's supplemental needs at trustee discretion
- Do NOT give C2 cash directly -- pay vendors/expenses from SNT account
- Do NOT make distributions that jeopardize C2's SSDI or Medicaid eligibility
- Keep detailed records of every distribution and its purpose
Post-Medicaid (~2037+):
- SNT pays primary house carrying costs if MAPT runs low
- This protects the house from liens -- protects C2's own inheritance
- Document each payment as asset protection, not gift to another beneficiary
At C2's Death:
- Third-party SNT: NO Medicaid payback provision
- Remaining assets distribute per trust document
What NOT To Do
- Never commingle funds between MAPT, SNT, and personal accounts
- Never let property taxes or insurance lapse (creates liens)
- Never make SNT distributions that could be construed as regular income to C2
- Never modify trust documents without attorney review
- Never skip tax filings -- even if no tax is owed, the filing is required
- Never make decisions about Medicaid timing without consulting the elder law attorney
Compensation
- Reasonable trustee fee: ~$2,900/yr (model assumption)
- Professional trustees charge 1-2% of assets ($8-16k/yr)
- C1 may waive the fee -- document the decision either way
Key Contacts (fill in)
Elder law attorney: ______________________________________________
CPA / tax preparer: ______________________________________________
Financial advisor: ______________________________________________
Memory care facility: ______________________________________________
LTC insurance company: ______________________________________________