Sheryll Law, P.C. helps clients protect assets and prepare for the future with irrevocable trusts.
What is an Irrevocable Trust and why is it beneficial? More times than not the higher your socioeconomic status is the more beneficial an Irrevocable Trust is. Each state has its own tax burden and the federal government’s tax burdens are ever changing. Setting a consultation with an Estate and Trust Planning Attorney near you who is experienced in Irrevocable Trusts in Long Island is important.
The overall benefits of an Irrevocable Trust are:
- Preventing beneficiaries from misusing assets, as the grantor of the trust you can set conditions and the terms for the distribution of trust’s assets.
- Allows parents to help ensure the benefits and care for a special needs child by preventing disqualification or ineligibility from governmental benefits.
- Diminish one's assets to ensure eligibility for government benefits, such as Social Security income and Medicaid (for nursing home care).
Irrevocable Trusts are beneficial when used correctly. Schedule a consultation to review options for Irrevocable Trusts.
Benefits of an Irrevocable Trust
Irrevocable trusts provide benefits you cannot receive with other estate planning tools.
Key benefits include:
- Meet eligibility requirements for Community or Nursing Home Medicaid
- Protecting your home from the government
- Shields assets from creditors
- Avoiding probate
- Minimizing or eliminating estate taxes
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Medicaid Planning With An Irrevocable Trust
“If you don’t know where you are going, you’ll end up someplace else.” ― Yogi Berra, former New York Yankees catcher
You never know if or when you will need Medicaid planning. Irrevocable trusts are a vital tool used for Medicaid planning. Medicaid values your assets when determining your eligibility. Using irrevocable trust, a Medicaid planning attorney can develop a strategy to help protect assets. An irrevocable trust appoints trustees besides yourself, so assets are not in the individual's name. This is used for Medicaid planning purposes as the applicant will not have the assets in their individual name but instead in the name of an Irrevocable Trust. An irrevocable trust relinquishes some control as your trustees will own the assets within your irrevocable trust.
Community Medicaid and Nursing home Medicaid now have lookback periods. If you want home care covered, it is important to discuss applying for Community Medicaid. This program has financial and medical guidelines that the applicant must meet the requirements for to be eligible . If you or a loved one requires nursing home care, you will need Nursing Home Medicaid. This program has a lookback period of five years. Due to the lookback period, there are penalties associated with gifting assets within that period of time. Discuss your options with an experienced long term planning attorney to understand how to manage Medicaid eligibility and protect your assets.
Can An Irrevocable Trust Be Changed?
In most cases an Irrevocable Trust is a complex structure that has been created to protect the assets in the Irrevocable Trust from tax liabilities and protections from certain other liabilities or creditors. Factors for modifying, revoking, or amending an Irrevocable Trust are:
- Trust agreement terms,
- Length of irrevocability,
- Identity of current and remainder beneficiaries, and governing laws.
Once the terms of the Irrevocable Trust have been identified, it is important to consult an Estate and Trust Attorney to discuss the options of modifying and Irrevocable Trust.
The protectionary structure of an Irrevocable Trust makes it appealing versus the similar Revocable Trust. The grantor of the Irrevocable Trust gives ownership to the Irrevocable Trust and the trustee. This allows the grantor of the trust to enjoy the benefits of the assets in the trust while protecting the same assets of an Irrevocable Trust to tax liabilities and protections from certain liabilities or creditors.
What Is A Medicaid Asset Protection Trust On Long Island?
Your home is your biggest asset. It is important to discuss protecting your biggest asset from Medicaid with an experienced estate planning attorney. You may ask, how do I protect assets from medicaid recovery? A Medicaid asset protection trust, also known as MAPT, can be used to put your home in to prevent medicaid from going after your home. It is important to discuss a long term care strategy with an estate planning attorney if you have any of the following questions:
- How to protect assets from Medicaid?
- Does a family trust protect assets from Medicaid?
- Does an irrevocable trust protect assets from medicaid?
- Does an LLC protect assets from Medicaid?
Our firm is here to protect your home from the government. Contact Sheryll Law, P.C. today to schedule a strategy session.
Asset Protection From Creditors
Protecting your assets is a common estate planning concern for many and rightfully so. An irrevocable trust will not provide protection with the sole intent of defrauding creditors. An Irrevocable Trust can protect your assets from creditors down the road if the need applies. You don’t have ownership of the assets inside of a trust. Thus, if the court hands down a judgment in favor of a creditor, the company cannot seize property inside of the trust. These trusts are a way to protect assets if you anticipate you’ll be subject to liability in the future. There are many benefits to establishing an irrevocable trust. It is best to discuss with a trust attorney to understand how to strategize an asset protection plan.