Trusts should definitely be part of your inheritance planning. A trust could be a key component of your inheritance plan because trusts are both versatile and powerful. Trusts can allow you to protect your assets during your lifetime so you can keep your wealth safe to pass on to new owners. Trusts can also make it possible for you to address specific needs that your heirs or beneficiaries may have.
For example, if you have a loved one with a disability that you want to provide a financial gift to, you can use trusts to ensure that the gift you give to your loved one does not cause a loss of access to means-tested benefits like Medicaid and Supplemental Security Income. Trusts can also make it possible for you to leave money to a spendthrift heir without worrying about money being lost or can allow you to leave money and property to a minor without having to worry about how the money will be managed until the minor is old enough to take responsibility.
You can protect your injury settlement with a special needs trust, provided you follow the rules for creating and funding this type of trust. Many people become disabled as a result of an injury. Their disability could result in costly medical bills and expensive long term care costs. Medicaid will pay for many of the costs associated with a serious injury or disability, but you won’t be eligible for Medicaid if you have too many assets. An injury settlement could potentially cause a loss of access to Medicaid benefits because the settlement would give you too much wealth– but a special needs trust could help you to keep your settlement safe while still getting Medicaid to cover you.
Many people believe that only the elderly should create trusts, but this is a myth. Trusts can be very helpful in protecting your assets during your lifetime in case you require Medicaid to cover your nursing home care since other medical insurance will not pay for long term care. However, to protect the maximum value of your assets, you’d need to have a trust in place and would need to have transferred assets into the trust at least five years before you need to qualify for Medicaid. You don’t know when you may need a nursing home, so you should act early to put plans in place.
Trusts can also be a key part of your legacy plan and can facilitate the timely transfer of assets to your loved ones while also helping you to avoid estate tax. Since you don’t know when something could happen to you, it is a good idea to make a trust early so you have the peace of mind of knowing your assets and family are as protected as possible.
If you are considering the creation of a trust, you should take some steps in advance to ensure that you make the right type of trust and to ensure that your trust is legally enforceable. To prepare for creating a trust, you will need to find the right attorney who can advise you. You’ll need to identify your goals for creating a trust so you can select the right trust type. You should also list the assets that you want to transfer into the trust. By thinking about exactly what you want your trust to accomplish and by identifying the assets that you are hoping to keep safe, you can put New York’s trust laws to work for you.
An asset protection trust is a trust that is created for purposes of protecting assets. Asset protection trusts must be created in a jurisdiction that allows this trust type or may be created offshore. The trust should be created in a jurisdiction with laws favorable to the protection of assets and it should be created in accordance with local requirements. Assets you wish to protect should be transferred into the trust with the goal of deterring creditor claims against you. You should work with an experienced attorney to create an asset protection trust and to make certain you have appropriately funded your trust.
A revocable trust is typically created for the purpose of transferring assets outside of probate process as well as for the purpose of protecting assets in case of incapacity. Many different kinds of assets could potentially be transferred to your revocable trust so those assets can pass on quickly to new owners. Some assets you may wish to transfer into your trust include intellectual property rights; ownership interests in businesses; real estate; stock shares; personal property with significant value; and other investments. An attorney can help you to understand the implications of transferring assets into a trust and can assist you in formally making a transfer of ownership of assets into your trust.