How much thought have you given to estate planning? For many it’s something they put off thinking about and by then, the benefits of doing this can end up passing them by. What most people don’t realize is that estate planning includes asset protection in the form of wills and trusts, both of which ensure that your wishes are carried out should something happen to you. While many are familiar with the general purpose of a will, not everyone understands the benefits of establishing a trust.
What is a Trust?
A trust is a legal entity under which one person (named the trustee) holds legal title to property for the benefit of the others (commonly known as the beneficiary). Whichever type of trust you establish, the trustee must follow the rules that have been legally put into place.
Testamentary Trusts
This type of trusts are created under a will. They are usually established to allow spouses to leave funds for their institutionalized husband or wife and can be used to pay for services like extra therapy, special equipment and other services that are not covered by Medicaid.
Revocable vs. Irrevocable Trusts
This comes down to how much you want to protect your assets from outside creditors. For an irrevocable trust, the terms can’t be modified without the permission of the beneficiary, but the property is safe from creditors and the assets preserved entirely for the beneficiaries. A revocable trust allows you to modify the terms, but in doing so you are not safe from creditors being granted funds if you are sued.
Supplemental Needs Trust
Although there are certain drawbacks, this type of trust can be established for people who are disabled and under the age of 65 and involves tapping into Medicaid. Even after moving to a nursing home, if you have a relative who is under 65 and disabled, you can transfer assets into a trust without incurring the standard period of ineligibility.
Regardless of the type of trust you need, the estate planning attorneys at the Law Offices of Todd Cushner & Associates can help. They are experts in all aspects of estate planning which includes asset protection. Do you live or work in White Plains, Westchester or the surrounding areas and want to learn more about trusts and wills? Contact us today for a free consultation.
