The facts ...
A trust is a contract between the Grantor (the person who creates the trust), the Trustee (one who controls the trust) and the beneficiaries (those entitled to benefit from the trust). You, as Grantor, determine how the trust will be operated by the Trustee and who benefits, how and when.
While a Revocable Trust permits you to maintain full control (as Trustee) and have access to all your assets (as beneficiary), an Irrevocable Trust, once created, may prohibit your right to control the trust (as Trustee) or have access to your assets, but you get to decide to what extent.
It is a common misconception that irrevocable trusts, once created, cannot be changed. While that is true of many irrevocable trusts created to avoid taxes (tax reduction or avoidance trusts), it is not true of all irrevocable trusts. An irrevocable trust is a trust you create for the benefit of yourself or others and once created, you, as Grantor, must give up your right to something.
Debtor/Creditor law provides that whatever you can get, your creditors can also get. You can have known creditors (i.e., bank/credit card debt) or unknown potential creditors (unforeseen lawsuits, nursing home, divorce). A typical income only irrevocable trust permits you to receive the income on your assets, but you must give up your right to your principal. In some irrevocable trusts, you can retain the right to change who gets your assets during your life and after your death, and maintain 100% control of your assets until your mental disability or death (asset protection trusts).
Tax reduction/avoidance trusts are much more restrictive than asset protection trusts. Typically, you cannot retain any right to control or access any of the assets in an irrevocable tax reduction/avoidance trust. There are many irrevocable trusts available that are quite flexible and grantor-friendly. You should consult a qualified estate planning attorney to get counseled on all your options before creating an irrevocable trust.
Contact The Law Office of Bryon J. Will, P.L.L.C. today at 405.308.4272 or bryon@bjwilllaw.com.
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WHO NEEDS ESTATE PLANNING?
The facts ...
Estate planning isn't about how much money you have, it's about protecting what you have for you, during your life and for those you love, after you're gone. It ensures what you have gets to the people you love, the way you want, when you want.
If you were to die today, are you comfortable everything will be taken care of the way you wanted? Estate planning is legally ensuring things will be handled the way you want by providing sufficient instructions.
Estate Planning really is for everyone. It doesn't matter if you have $40,000 or $400,000. You still have to plan for the future. Whether it's to name a guardian for your minor children or ensure your children don't blow through your assets if you unexpectedly die or become disabled (Terri Schiavo case).
Estate planning can only be done by attorneys, and it can be as simple as a Will, Health Care Proxy, Living Will, and Power of Attorney. It can also include a revocable, probate-avoidance trust, asset protection trusts, multi-generational tax- saving trusts, tax-saving charitable trusts, private family foundations, and many other fact-specific strategies and tools.
Keeping your Estate Plan Current ...
Once completed, your estate plan should be reviewed and kept current with life events such as birth, death, marriage, or divorce of anyone included in your plan. In addition, you should review your plan if there is a significant increase or decrease in your finances or if the laws related to your estate plan change.
The Law Office of Bryon J. Will, P.L.L.C. offers a maintenance program that provides you regular access to us to make sure your estate plan stays current with your wishes, family, finances, and law.
Contact The Law Office of Bryon J. Will, P.L.L.C. today at 405.308.4272 or bryon@bjwilllaw.com.
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MEDICAID PLANNING
The facts ...
Assets in a revocable living trust are not protected and must be used to pay for the costs of long-term care.
If you are married, your home is exempt and cannot be taken when applying for Medicaid. If you are single or widowed, your home is exempt up to $500,000. If you transfer your home to your children, not only will it result in immediate ineligibility for Medicaid, but it could also:
· Trigger a gift tax, and,
· Result in your child's spouse (the in-laws) inheriting your home.
Giving your assets away means losing control. It's not safe even if you trust who you give it to. If that person divorces, goes bankrupt or is sued, all of the money you transferred is at risk. There are asset protection trusts that permit you to keep 100% control of your assets without the risk of losing them if long-term care is needed.
You do not have to wait 60 months to qualify for Medicaid. Eligibility is calculated on a case-by-case basis. It is possible to have over $250,000 in cash and qualify immediately. Get professional advice and learn the facts.
It is never too late to protect your assets even if you are already in a nursing home. In fact, you may be able to qualify for Medicaid sooner if you are already in a nursing home.
A nursing home or hospital that offers to file a Medicaid application for you has no obligation (and often can't) advise you on how to protect your assets. Only a qualified Medicaid planning attorney will be looking out for your interests.
Applying for Medicaid prior to qualification could result in being disqualified for a longer period of time than you otherwise would have been (it could be longer than 60 months).
Make sure the attorney you hire is experienced in Medicaid planning. Would you go to your regular doctor for a heart problem?
Consider long-term care insurance. An annual premium for a couple may be less expensive than one month of nursing home care and with proper planning, it may also enable you to stay home if you become ill.
Don't let fear stop you from planning. The earlier you start, the more you can protect and the more options you have. Contact The Law Office of Bryon J. Will, P.L.L.C. today at 405.308.4272 or bryon@bjwilllaw.com.
Aggressive and Effective Representation
The Law Office of Bryon J. Will, P.L.L.C.
4301 Southwest Third Street
Oklahoma City, OK 73108
Office: (405) 308-4272
Fax: (405) 843-7935
bryon@bjwilllaw.com