Long Island Elder Law & Estate Planning

What Advantages Do Trusts Provide?There are various estate planning tools that you can use to bring your wishes to fruition. Trusts are very useful, and there are different types of trusts that serve different purposes. We will look at some of them in this post.

Asset Protection

If you want to protect assets from creditors and claimants, you could use an asset protection trust. Such a trust can be used to protect assets for your own purposes, but you can also protect assets that you are leaving to a loved one.

For example, some people create spendthrift trusts. This type of trust could be a good choice if you have a poor money manager in the family.

You would name a trustee, and you would leave behind instructions in the trust declaration. The trustee would follow your instructions and distribute assets to the beneficiaries in accordance with your wishes, but the beneficiary could not directly handle the funds. Plus, creditors could not seek to attach assets that were held in the trust.

Estate Tax Efficiency

High net worth families may face estate tax exposure. In 2014, the federal estate tax exclusion is $5.34 million. If you are transferring more than this amount, the federal estate tax is a factor for you.

There are various different types of irrevocable trusts that are used for estate tax efficiency purposes.

Special Needs Planning

People with special needs are often enrolled in government benefit programs like Medicaid and Supplemental Security Income. These programs are only available to people who can prove that they have financial need.

If you left a direct inheritance to a benefit recipient, eligibility could be lost.

To account for this, you could establish a special needs trust. The trustee could use assets in the trust to satisfy the supplemental needs of the beneficiary without jeopardizing benefit eligibility.

Medicaid Planning

Many seniors seek Medicaid eligibility late in their lives, because Medicare won’t pay for long-term care. As we stated above, Medicaid is a need-based program.

You could convey assets into a Medicaid trust to get the resources out of your own name with future Medicaid eligibility in mind.

Revocable Living Trusts

A revocable living trust can be a good choice if you want to facilitate postmortem asset transfers outside of probate. This is a time-consuming legal process that can also be expensive. It would come into play if you use a last will to transfer your personally held property.

Schedule a Free Consultation

If you are interested in creating a trust, our firm can help. We offer free consultations, and you can send us a message through this page to set up an appointment: Smithtown NY Estate Planning Attorneys.

Forbes Content

To view our content on Forbes.com, click this link: Forbes Contributor Mark Eghrari.

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About Eghrari Wealth Training Law Firm

Mark S. Eghrari is an attorney in private practice in Smithtown, New York. He has been in practice since 1988. Mark S. Eghrari provides extensive estate and tax planning services to individuals and businesses. Mr. Eghrari’s primary focus is helping clients avoid probate, minimize or eliminate Federal and State Estate taxes and protect their assets from the high cost of nursing care, if they become ill.