More details to this question:
Our son is 26 and has medical insurmace through his employer. He is also a Type1 diabetic and incures extensive medical and perscription bills per year. His grandmother would like to set up something (a trust?) where he can draw from it to pay medical expenses when needed. Is this possible. What is it called. How is it set up?
1 ANSWER
2 Awards
It is not necessary to create a trust to pay someone's medical bills. Grandmother can pay them directly while she is alive with no tax consequences to her. If she likes, she can create a trust (either stand-alone or in her Will) which will pay the bills. She should note that the income tax brackets for trusts and estates are compressed, meaning that it need earn less money than an individual to be taxed at a high income tax rate. This is a good reason to have the trust be funded only when, due to fraility, disability or death, she is unable to make payments directly.
Answered on Feb 09th, 2021 at 5:15 AM
This is general information. It cannot substitute for a personal consultation with an attorney. It is not intended to be legal advice or imply an attorney-client relationship.