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Trusts are a crucial component in your estate plan. The key to understanding trusts is to look at their benefits. Trusts can keep your estate out of probate after death. Trusts can deliver instructions on what happens, if you become incapacitated. Trusts can create a continued source of income, and can help protect your assets and property. Most importantly, it’s a great way to ensure you’re eligible for medicaid. Our law firm can help ensure that a trust is setup, which focuses on your needs – and creates the best outcomes for you.
There are many different types of trusts. Below are a list of the most common types.
We can work with you to ensure that you can determine what’s the type of trust, best suited to your goals and needs. Creating the right trust is the first step in estate planning, and asset protection
Living trusts are a type of will substitute, and can provide protection for your assets during your lifetime, and upon death. During your life, you are the grantor, trustee, and beneficiary of the assets you transfer into the trust. You have full use of the assets, and can amend, or revoke, the trust at any time. If you’re no longer able to assume those responsibilities, you can appoint a Trustee to take over. Upon death, the assets are distributed to your beneficiaries. This trust accomplishes the same objectives as a will, but also protects you while you are a live. It directs the distribution of your assets, and allows you take advantage of the estate and gift tax laws. Unlike a will, it becomes effective ASAP and exists after your death.
There is no need for probate, thanks to the living trust. All assets are owned and distributed through the living trust. Second, it gives instructions if you become incapacitated. Your trustee is bound by law to follow your instructions. The living trust helps protect you from costly guardianship proceedings. In addition, you forgo all the court fees and attorneys by having a living trust, since you avoid the guardianship/probate proceedings.
This is tool for medicaid planning. Properly drafted, it provides you a source of income, and allows you to become medicaid eligible. It also protects your assets, from the costs associated with long term case. It’s a good tool to enable you to qualify for medicaid benefits, while protecting your assets so they can get distributed to beneficiaries later. It can be used as a vehicle to make gifts to your children, or other beneficiaries. The assets placed in a Gift Trust, reduce your taxable estate, and appreciate in value over time. The appreciation of the assets isn’t taxable to you.
This is a method to exclude the proceeds of life insurance policies from your taxable estate. This type of trust avoids probate. It can help solve the problem of an estate which is cash poor – without adding value to the gross taxable estate.