Naturally, you are worried about protecting your assets from estate related taxes. You are probably also concerned about who inherits, and in what form they inherit, your assets after you pass away. These and many other typical issues must be addressed with proper estate planning. However, have you given enough thought to the devastating financial impact of long term care expenses on an estate? Did you know that you can plan ahead to protect hundreds of thousands of dollars from the rising cost of nursing care? Are you taking the steps necessary to protect your home and other assets in case you or a loved one needs long term care? If you have not done this planning yet, it is not too late.
Gifts To Irrevocable Trust Will Start The Countdown To Asset Protection!
Now is the time to start proper planning so that you and your family are not caught off guard and left scrambling should the need for nursing care come unexpectedly. It is always better to plan ahead, but in this case, the preservation of your assets depends on it. There is a Five Year waiting period until gifted assets are fully protected and that is why gifting to a Medicaid Asset Protection Trust far in advance of the need for care is so important. By placing your home, cash, stocks and mutual funds into a Medicaid Asset Protection Trust now, you will begin the countdown to achieving family security. Without advance gifting, you will be lucky to protect a fraction of the family assets through “Crisis Planning.”
Why Gifts To A Medicaid Asset Protection Trust Are The Best.
Clients often ask, “Why can’t I just gift my assets to my children?” The answer is that gifting your house and financial assets directly to children and other recipients is rife with danger. What if a child gets sued or divorced after you gift your assets to them? There is a good chance that the gifted assets will be lost because your children own them and therefore they are likely to be available to creditors and divorcing spouses. What if one of your children spends all of the assets you gift to them? Those assets will be gone and you will have to rely on the children who actually retained the gifted assets. Now you have a smaller pool of assets to draw from and your more “trustworthy” children will be left to carry the full financial burden.
Gifting your assets to a Medicaid Asset Protection Trust will keep them safe for the remainder of your lifetime. The Trust will build a wall around the gifted assets so that the spending habits, creditors and divorcing spouses of your children cannot reach them. Your children will not be the owners of the assets gifted to Trust, the Trust is the owner. Further, your more “trustworthy” child or children can act as Trustee(s) for your lifetime. The other children will simply be beneficiaries and won’t have rights to the assets until after you have passed away. Gifting to Trust will allow you to get the best of all worlds, you will be able to protect the assets from long term care spending, insulate them from the individual beneficiaries’ personal issues and insure the right person is in charge of them.
In addition to the Trust benefits outlined above, gifts to Trust can be structured to take advantage of various income and inheritance tax options. Although the term “Medicaid Asset Protection Trust” is used generally, there are many variations of the overall Trust structure. We are able to tailor the Irrevocable Trust to meet your particular needs and protect assets from taxes and probate. One example of a unique Trust option is the Medicaid Defective Grantor Trust (“MDGT”). Click here to take a look at this earlier article that I wrote about the MDGT so that you can see the related benefits and also get a flavor for the advantages that can be achieved through the use of proper trust planning.
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Get in Touch To Get Started.
The Medicaid Asset Protection Trust is the centerpiece for many successful estate and elder law plans. Call (610) 933-8069 now to schedule a free consultation so that we may discuss your personal circumstances and the best approach for you. We will take you through the planning process from beginning to end. We will prepare the Trust that best suits your particular situation and help you and your family transfer assets to the Trust to insure that they can be preserved and enjoyed by you and your family for generations to come.
For assistance developing a comprehensive nursing home asset protection plan in Pennsylvania, please contact Douglas L. Kaune, Esquire at (610) 933-8069 or email him at dkaune@utbf.com. Doug’s entire practice is focused on elder law, Medicaid application, estate planning, trust planning, estate administration and protection of clients’ assets from nursing home spending and estate and inheritance taxation. Unruh, Turner, Burke & Frees, P.C. is a full service law firm which has three convenient office locations in Phoenixville, West Chester and Paoli, Pennsylvania. The firm primarily services clients in Chester, Montgomery, Delaware, Philadelphia, Bucks and Berks Counties, but can represent clients throughout Pennsylvania.
