Asset Protection Through Revocable And Irrevocable Trusts
- What is a trust, and do you need one?
- Can trusts really protect assets?
- Can trusts protect Medicaid eligibility?
- How do you know what type of trust is best?
Estate planning can be complicated, especially the subject of trusts. Stefans Law Group offers decades of experience in setting up trusts for asset protection, Medicaid planning and other purposes. We can educate you and tailor your trust(s) to your circumstances and estate planning goals.
What Is A Trust, And What Is It For?
In the simplest terms, a trust is a legal entity that holds some of your assets separate from your estate. When you die, those assets do not go through the probate process like the rest of your estate. Instead, those assets transfer directly to the beneficiaries.
Avoiding probate is just one benefit of trusts. The primary use is for asset protection. Trusts can shield family wealth from threats such as creditor actions and lawsuits.
Another common use of trusts is to preserve Medicaid eligibility for a family member who has disabilities or an elderly parent who needs nursing home care. The trust provides spending money and extras without disqualifying that person for government assistance.
Revocable Vs. Irrevocable
There are two main types of trust, each with its own pros and cons and useful purposes:
- If you create a revocable trust, you maintain complete control over the trust and the trust property, and you can amend, revoke or terminate the trust at any time. You can be the creator, beneficiary and trustee of this type of trust. These trusts are used primarily for asset management, avoiding probate and tax planning.
- If you execute an irrevocable trust, you cannot amend or change it – the trust property may only be maintained and distributed by the trustee (as provided in the document). For example, you can receive the income generated from trust property/principal, but you cannot gain access to the actual trust principal/property. This is a popular tool for Medicaid planning and is also commonly known as an asset protection trust.
Trusts And Medicaid Eligibility
When it comes to Medicaid planning and eligibility, we see that asset protection often takes on a special urgency and requires a different approach. Given the high cost of nursing care, and the potentially devastating economic impact on the family, it is imperative to plan carefully and timely, and in a way that ensures none of the various complicated Medicaid rules are violated. Violations can and often do result in the ineligibility of benefits.
Discover Our Holistic Approach To Your Future
Our compassionate team is knowledgeable and experienced with the Medicaid rules and regulations and using legal tools for asset protection planning. Our personalized services can help you maximize your protection and benefits. Stefans Law Group takes a unique holistic life care planning approach. We consider every aspect of your life – including financial, tax and legal, to ensure you are protected as much as possible.
For a general exploration of trusts and estate planning, or to talk about specific trusts for specific goals, arrange a free initial consultation. We have four locations on Long Island. Call 516-692-2744 or contact us online.