During the inheritance planning process, you are going to need make a decision regarding the legal tools to use to ensure your assets are protected and your heirs can be provided for. There are many different legal tools which can be a part of your plan, and many people find that it makes sense to include trusts as an essential component of their inheritance plan. There are also different types of trusts, so there may be a variety of different options available to accomplish your goals.
The Law Office of Michael Robinson, P.C. has extensive experience with inheritance planning and we can advise you on whether trusts should be a component of your plan or not. We can also provide you with the assistance you need in creating the right types of trusts and following all legal formalities necessary to protect assets and to ensure that your heirs can be provided for. To learn more, contact a Rochester and Finger Lakes inheritance planning lawyer today.
Why Trusts Should be Part of Your Inheritance Planning
Trusts are a bifurcation of the possession of property and the ownership or use of that property. When you create a trust, you use a trust document to spell out the details of that trust. The trust owns the property, which is managed by a trustee, and which is managed for the purpose of providing for beneficiaries. There are different kinds of trusts, including revocable and irrevocable trusts, each of which serve very different purposes.
Trusts should be a part of your inheritance planning for lots of different reasons. Some of the possible purposes of trusts as part of an inheritance plan include:
• Avoiding estate taxes: With certain types of trusts, you can prevent the assets which are owned by the trust from counting as part of your taxable estate. There are estate taxes assessed both in New York and by the federal government when an estate is in excess of a certain dollar value.
• Avoiding probate: Assets in trusts will transfer to new owners via trust administration, rather than via probate. This process can be faster and allow for new owners to take control of assets much more quickly than if they must wait for the entire probate process. When investments, a family business, or other property to be inherited must be managed carefully and a delay is not desirable, trusts can be the best answer.
• Preserving access to benefits: If you are planning on giving a gift to someone with a disability who is receiving means-tested government benefits, simply transferring the property could result in the recipient being disqualified from receiving benefits like Supplemental Security Income (SSI) or Medicaid. The use of a special needs trust can prevent this from happening.
• Avoiding spending assets on nursing home care. Medicaid is a primary payer of nursing home care costs because Medicare and the majority of private insurers only offer very limited coverage. Medicaid will not begin paying until you have limited resources, which means spending your own money on a nursing home until your estate is worth less than Medicaid’s excludable amount. If you create a trust and transfer assets into it at least five years before you apply to get Medicaid to cover a nursing home, you won’t lose the assets the trust owns.
• Protecting heirs. You may be planning to leave your money to someone who is at risk of bankruptcy, claims made by creditors, or losses due to divorce. Your heirs may also simply be irresponsible when it comes to managing money. If you simply leave them cash or property, the assets could be squandered quickly or lost in court proceedings. However, if the property is owned by a trust and managed by a trustee for the benefit of heirs, the money can be doled out slowly over time so it does not run out. The trustee will also make sure the assets are carefully managed and kept protected.
These are the key reasons why trusts should be a part of an inheritance plan. There may also be many additional purposes for a trust when you create your estate plan, so you should discuss your specific goals with your attorney.
A Rochester and Finger Lakes Inheritance Planning Lawyer Can Help
Do not put your family at risk of losing out on an inheritance and do not put all that you have built in jeopardy of being lost. Talk with a Rochester and Finger Lakes inheritance planning lawyer today to find out how trusts can be used to make sure you can leave a strong legacy behind. Contact The Law Office of Michael Robinson, P.C. to learn more. Give us a call at 585-374-5210 or contact us online to find out how we can help you. You can also join us for a free workshop to find out more about trusts and how they can be used in your inheritance planning process.