You’ve worked hard to earn everything you have, and you don’t want it to disappear because of a lawsuit, a creditor, a nursing home, or Medicaid. While it may seem like you don’t have many options to protect your assets, that just isn’t the case. When you plan ahead, there are a variety of legal ways to shield your assets from people looking to take advantage.
Hiring the right attorney is the first step toward effective asset protection. At Safe Harbor Wills & Trusts in Watertown, our entire practice has been set up to help people with elder law emergencies, Medicaid problems, probate, estate administration, wills, and asset protection. Choosing a law firm that was designed to help you navigate these confusing waters is the best way to ensure that your assets stay where you want them. Contact us today to set up an appointment, or read on to learn about some of the many ways that our attorney can set up an effective asset protection plan for you.
Creating a Trust
One of the most effective and flexible ways to shield your assets is to create a trust. While you might have images of extremely wealthy people when you hear the word “trust,” many people can benefit from using a trust.
What is a trust?
A trust is a legal agreement where one person, the trustmaker (also referred to as a grantor or trustor), transfers their assets to a trust. The trust is managed by a trustee who distributes the assets to the beneficiaries named in the trust agreement. In effect, once the trustmaker transfers their assets, they no longer own them — the trust does. Based on the guidelines set forth in the trust, the trustmaker may receive some funds from the trust, or they may be allocated to other people, also known as the beneficiaries.
Types of Trusts
There are several different kinds of trusts, each with their own unique legal and tax liabilities. An experienced attorney, like our attorney at Safe Harbor Wills & Trusts, will be able to help you determine which type, or types, of trust is right for your unique situation. Trusts fall into one of two umbrella categories — revocable trusts and irrevocable trusts.
Revocable trusts, sometimes called living trusts, grant you a much larger degree of flexibility while you are still alive. If you fund a revocable trust, you can name yourself the trustee, which means that you own and have control over the trust. It can also be dissolved whenever you want, unlike an irrevocable trust. This kind of trust, because it is still owned by the trustor, is generally subject to estate taxation.
Irrevocable trusts cannot be dissolved once they have been created. When set up properly, an irrevocable trust may avoid probate, and the terms and contents of the trust do not become public record like a will does. While an irrevocable trust is an effective and efficient way to have your assets managed and handled after you have passed away, there are several important ways you can benefit from these trusts during your lifetime:
First, because you no longer own these assets, you will be free of the tax liabilities of any extra income earned from the assets owned by the trusts (interest, dividends, etc.)
Second, an irrevocable trust may also lower your overall worth to the point where you will more easily qualify for Medicaid and Medicare in the future.
Third, the assets which funded the trust, in many cases, are safe from lawsuits filed against you as an individual.
Contact Safe Harbor Wills & Trusts in Watertown today to learn about more ways that our attorney can help you protect your assets now and in the future. Our firm focuses on wills, probate, and estate management because we understand how difficult it can be to try to take care of all of these areas on your own. Our years of experience in these fields allows us to better understand the current legal and financial landscape, which enables us to build a better plan for you and those you care about. Trust us and you will be able to rest easy knowing that we created a plan that is the best it can possibly be for you.