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Some people think that trusts are only for wealthy people who want to provide a healthy income for their children so they never have to work. Although these kinds of trust exist, most trusts have more practical purposes. As a skilled estate planning attorney could explain, a trust is an essential estate planning tool that can be useful for people from all walks of life.
Many estate plans include a trust because, depending on how it is structured, it can keep property out of probate, protect your assets from creditors, and preserve you and your family’s quality of life if you someday need public benefits like Medicaid. Our Riverhead trust lawyers could assess your situation and explain whether a trust might meet your needs. If so, our legal professionals could create a trust tailored to your goals.
When you die, assets you own solely in your name do not immediately go to your loved ones. They must go through the probate or estate administration process before they are distributed to your family members and other beneficiaries.
When you put property into a trust, you give up ownership of the property, and its title is transferred to the trust. You can construct the trust so that when you die, the property is distributed to beneficiaries that you named when you created the trust. If the trust is revocable, you maintain the ability to manage the trust assets, including removing them from the trust, selling them, or dissolving the trust.
Avoiding probate saves your loved ones time, money, and potential financial hardship. A Riverhead attorney could explain the other benefits of a revocable living trust or a joint one with your spouse as they apply to your circumstances.
A form of trust called an irrevocable trust allows you to protect assets from creditors and reduce the value of your estate for estate tax purposes. This is a valuable benefit if your work exposes you to liability in personal injury lawsuits or if you have substantial assets, and your heirs may have to pay estate tax.
In exchange for this protection, you must give up not just the ownership of the assets in the trust but also give up control over them. You would name a trustee who would control and manage the assets for the benefit of the beneficiaries. Irrevocable trusts are not for everyone but are a valuable tool for some. Ensuring the trust achieves asset protection and tax efficiency requires the help of a Riverhead attorney.
People with significant health challenges often require public assistance to get the care they need. Trusts can help patients qualify for public benefits while providing them with some income and preserving assets for other family members.
Care for most nursing home residents is paid by Medicaid. Although the income limits for Medicaid are low, there are strategies middle-class and upper-income families can take so that their loved ones qualify for Medicaid long-term care. A Medicaid asset protection trust is a special kind of trust that can provide money for approved expenses like dental care, haircuts, or a streaming service to patients who are residents in skilled nursing facilities.
New York Estate, Powers, and Trusts Law § 7-1.12 allows similar trusts for people with persistent mental or physical disabilities. Funds in these trusts can be used for certain approved expenses to improve a disabled person’s quality of life without endangering any public benefits they receive. Parents and grandparents often establish these trusts for their disabled family members. A person who develops a disability later in life could fund their own special needs trust. Speak with a Riverhead attorney about establishing a trust for a person receiving public benefits.
Trusts are versatile tools that can be designed to accomplish many different goals. A trust can be an effective and cost-efficient component of a comprehensive estate plan.
Find out if a trust would further your financial goals and hopes for your family. Contact a Riverhead trusts lawyer from Tully Law Group, PC, today for a free consultation.
