June 23, 2010
Wills, revocable trusts, and irrevocable trusts are all estate planning devices. Revocable trusts are a type of trust that can be changed, modified, or revoked at anytime. This type of trust allows you to change your mind with regard to all aspects of the terms of the trust. These trusts are very flexible.
Uses of a revocable trust:
1. Revocable living trusts avoid probate. The assets in the trust at the time of the death of the individual who made the trust pass directly to the beneficiary. The trust does not have to be probated.
2. It is private document. Wills need to be probated. This opens up the terms of the will to review by a court. Once the will is filed with the courts it becomes a public document and other individuals can obtain copies of the will. An example is Jacqueline Kennedy Onassis’s will in Manhattan. So many people wanted to see it that it was displayed to the public mounted it under plexiglass. The details of your assets and the individuals who receive your assets remain a private matter.
3. It establishes a plan that deals with mental disabilities such as Alzheimer’s disease and other mental illnesses that effect seniors. When you place assets in a revocable trust and the person who created the trust becomes disabled, the trustee or alternate trustee supervises the trust and distribution of the assets therein. If you do not have this type of trust or a power of attorney, it becomes necessary for your loved ones or next of kin to bring a guardianship proceeding under article 81 of the New York Mental Hygiene Law to appoint a guardian for you.
December 1, 2009
If you, a spouse, or parent think that you may need the services of a nursing home in the near future, you should know that there are some things you can do to plan for this possibility and help maintain some of the person’s assets.
Nursing homes can be very expensive. Residing on one can deplete $9,000 to $12,000 per month from one’s assets on a monthly basis. You can apply for Medicaid to assist with these bills, but they will only begin paying once the person has completely “spent down” their assets to$13,800 (in 2009) altogether.
There are steps that you can take which would allow you to preserve much of your assets for the next generation while still qualifying for Medicaid if and when nursing home services are needed.
When an individual applies for Medicaid, and the Department of Social Services is looking into whether the application has indeed depleted his or her assets down to almost nothing, they actually look up to five years prior to the application date to see if the person made any transfers to children or others in order to preserve their assets from Medicaid’s required “spend down” to poverty.
Elder law attorneys, such as the experienced lawyers at The Law Office of Elliot Schlissel, can assist individuals in applying for Medicaid or, for instance, setting up an Irrevocable Trust that may allow a senior to preserve his or her assets from Medicaid’s “spend down” requirement throughout their lives.
We can personalize these trusts depending on each individuals circumstances.
For instance, if someone has owned their home for a long time, such that the house has increased in value by $250,000 for individuals or $500,000 for married couples, and if the Irrevocable Trust does not appropriately deal with this increased equity in the residence, there can be significant tax liability when the house is sold.
Regardless of whether you need an Elder Law attorney to prepare a Medicaid application or create any other kind of Medicaid plan, you can contact our offices at 800-344-6431 or e-mail us with any questions or to set up a free consultation.
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