I have a family member who invested in a Real Estate Investment Trust that cannot be cashed out until the Trust sells the properties and liquidates the trust. He has +$7000 in it, which, of course, is above the Medicaid limit of $2000. Does anyone know if that will keep him from getting Medicaid, even though he has no control over it? ALSO, he needs money now to pay off his handicapped vehicle, and I was going to give him an interest free loan of that $7000 to help him, but be paid back when the REIT is liquidated....will Medicaid honor that loan? I have tried to talk to people at Medicaid, and cannot get a straight answer, and he really does not have the money to go to an attorney. Lives in Indiana....
Like sometimes oil & gas royalties are owned by an elder applying for Medicaid but they really can’t be sold as is a tiny % of a field over several counties with dozens & dozens of owners. And for more fun, really doesn’t pay much in royalties. It’s an non-accessible or inaccessible asset so not an issue for Medicaid. Although the $ paid by the royalties count in their income//assets & amortizated for year. It’s common enough that O&G royalties were a ? on the annual renewal for Medicaid in the standard questionnaire my mom got for TX Medicaid.
For the car, I’d get it done as a legit loan or promissory note drawn up with witness & notarized between the two of you. The collateral is the REIT.
There’s going to be some sort of probono legal clinic in your state. Perhaps affliated with a law school.
There are attorneys here who periodically offer advice. You could use the "contact us" link at the bottom of the page and ask if an attorney would opine on this issue, at least just to give you a heads up on what you're dealing with.
However, I would ask if you or he have actually read the terms of his REIT investment, or did someone tell you that he can't cash out his investment?
I really do think you need to see an attorney, even if he doesn't have the funds for one. Some investments are too complex for ordinary investors (that's not an insult, just an observation), and can cause complications later.
Is the REIT for commercial or residential investments? Do you know how many properties are involved? This might offer more insight into when his share could be liquidated. There might also be specific terms allowing cash out for hardship situations, such as medical issues.
What you could do as well is contact the company managing the REIT and raise the issue with them. It's worth a try. And sometimes these complex documents have "weasel words" which allows relaxation of terms for specific situations.
What you also could do is visit the local Senior Centers on "law day", when they have attorneys offering free advice. They might be able to sort out the issues, i.e., Medicaid might treat a REIT investment differently than those than can be liquidated. Or an elder law attorney might have a different take on how to treat a potentially illiquid investment.
Another thought is to contact the county and state bar associations and ask if any pro bono advice is available. Some firms allow their attorneys to offer pro bono advice to people in need. I think though that the fact that he invested $7K might not support the perception that he is in financial need.