Plan for the Future
You’ve worked your entire life to build up your assets, and planning ahead can ensure that you retain control over most or all of them and utilize them to help you at the end of your life and leave a legacy for those you love.
Nursing home costs are no joke. Most people assume that they will lose everything or cannot afford long-term care. Medicaid can assist you, but you may not qualify if you have a higher amount of assets. You have options. You can take steps now that can provide protection and support when you need it the most.
What is an Irrevocable Trust?
An irrevocable trust can be an excellent option to protect your assets. By creating one, you place assets within the trust that are typically exempt or safe from the state accessing them or counting them into Medicaid eligibility calculations.
The trust’s creator relinquishes control over the assets because an irrevocable trust doesn’t generally allow an option to make changes in the future. The other appealing benefit of an irrevocable trust is that the assets within it will likely not have to be included in a probate process upon death and, therefore, can be transferred swiftly to the appropriate beneficiaries. This option can save time and money following your death and allow easier access to the assets you intended them to have.
Other Benefits of an Irrevocable Trust
It is also important to note that you can minimize the estate tax implications you and your loved ones will have by creating a trust. If you’ve worked all your life for the assets, make sure you protect them so they aren’t susceptible to unnecessary taxes, taking more money out of the pockets of your loved ones.
Protection from creditors is another appealing characteristic that an irrevocable trust offers. If you are in an industry that is susceptible to creditors coming after you, such as doctors, it is especially critical to protect your assets from creditors. It is essential to create these in a timely fashion; however, if it is assumed that the intent to create the trust was simply to avoid active creditors from accessing it, it may be deemed unenforceable. Speak with your trusted attorney regarding this aspect for guidance.
What is a Revocable Trust?
A revocable trust allows the creator to retain control over the assets within. They can choose to be the manager of the trust and handle the assets based on their needs throughout their life, and upon death, the assets will transfer to the beneficiaries.
One drawback to a revocable trust is that the assets within aren’t typically safe from estate taxes or inheritance taxes. The probate process may also be required for revocable trusts; however, it may be streamlined by utilizing this tool.
A Dynasty Trust, sometimes referred to as a generation-skipping trust, is another option that may work best for you and your family. Tax-free transfers of assets can occur to those that are at least two generations removed, typically grandchildren. These trusts can typically be set up to allow for set payments to ensure the money is used as intended, not in the wrong hands, or susceptible to those with poor money management skills.
Other Trust Options
A charitable remainder trust may be of interest to you if you wish to donate a sum of money to a charity upon your death. These can typically be set up to provide an income stream to a beneficiary for a set amount of time, and then the remainder be gifted to the charity of your choice.
Special needs trusts or supplemental needs trusts can provide for medical and other needs for disabled loved ones. It is important to note that these trusts typically can be set up to work in conjunction with federal programs to ensure your loved one still qualifies for benefits.
A Qualified Terminal Interest Property Trust or a Q-TIP trust can be used for blended families or those with children from a prior marriage. Setting up a Q-TIP correctly can ensure that benefits are directed toward specific beneficiaries after the surviving spouse passes.
Protect What is Yours and Theirs
We respect how hard you worked to get where you are and your wish to ensure you and your loved ones get to benefit from your legacy rather than the state. There are several tools available that can allow your exact needs to be met.
Our team is incredibly dedicated to ensuring you have an effective and comprehensive plan in place. Our own family experienced a scenario where estate planning would’ve made life easier for everyone had it been done, and it has been our passion because of this.
We take time to sit down with our clients and prepare them for life as well as for death. Estate planning can help you get the most out of your hard work and ensure you can provide for your loved ones long after your death.
We encourage communication rather than make it impossible to get ahold of us. We value this open and efficient communication style, and we want our clients to be able to rely on us. Our entire team is dedicated to you and your family’s overall success.
Some may think that estate planning can be costly. The short answer is that though it can cost some to work together on your comprehensive estate plan, but the money and time savings far outweigh the costs to plan ahead. Don’t leave questions for your family or assets to the state.
Call our office today at (319) 379-2007 to get started.