As part of your estate planning, you may want to consider establishing one or more trusts. You can employ trusts to manage your assets during your lifetime and appoint a trusted loved one or professional firm to distribute the assets according to the trust document after death.
Trusts can legally circumvent the probate process, which can be complex and expensive. Assets transferred to some trusts can reduce the amount of taxes you owe and allow you to qualify for Medicare, which pays for nursing home care should you need it. If you wish to provide for a special needs family member, a trust can accomplish that, too. Sit down with a Staten Island trusts lawyer to discuss which trusts would be beneficial to your situation.
Living trusts are controlled by their makers, who can add or remove assets and change beneficiaries at any time during their lives. Once the maker dies, the living trust becomes irrevocable.
A living trust can help individuals in Staten Island save money by avoiding probate. These documents are private, so nobody can search for details as they can for wills, which are public. Living trusts are also invaluable when makers become incapacitated because named trustees can step in and manage the maker’s affairs instead of the court interceding to create a conservatorship.
Irrevocable trusts are used for tax purposes. The trust is the new owner of the assets the grantor deposits, with an independent trustee managing it. Basically, the maker cannot change any of the assets or beneficiaries of an irrevocable trust because they no longer own them.
A Medicaid Asset Protection Trust allows makers to deposit assets to whittle their worth to qualify for Medicaid. Makers choose family members or friends to follow explicit instructions about how the trust should be managed. Makers and their spouses are not permitted to serve as trustees of the maker’s Medicaid-qualifying trust. Instructions given to the trustee cannot be altered, but makers can discuss suggestions with trustees. Although some control over assets is entrusted to someone else, if the maker is not the beneficiary, they can change beneficiaries as many times as they wish.
If a maker’s income is still over the Medicaid threshold, reported by the New York Department of Health as $1,565 a month for a household of one and $2,268 for a married couple if the parties are over 65 or disabled, a second trust is necessary.
Income exceeding the Medicaid limit is deposited in a Pooled Trust, also called a Community Spend-down Trust. The income in a pooled trust is managed by a non-profit entity that generally charges fees of about 8.5 percent of the income flowing into the trust. Talk to a Staten Island trusts attorney to get more information about these valuable estate planning tools.
Trusts can serve many purposes, as a lawyer could explain. A special needs trust allows parents, guardians, grandparents, and other concerned family members and friends to provide for a person who is most likely collecting Social Security or Supplemental Security Income payments because they are disabled physically or cognitively. A special needs trust preserves their benefits, which also have capped income requirements.
Charitable trusts allow makers to support their favorite charities during their lifetimes and after death.
Although makers cannot leave money to beloved pets in wills, they can create a pet trust for the animal’s care. These trusts are deemed valid in New York Estates, Powers and Trusts Law § 7-8.1.
Estate planning is often left for another day, but it can benefit you throughout your lifetime. Trusts are used to provide for disabled family members, reallocate your assets so you qualify for Medicaid if you need nursing home care in the future, and can provide tax benefits. Trusts avoid probate, so they are cost-efficient and fast when assets need to be distributed.
We could strategize with you to help determine your goals and current needs in managing and allocating your wealth. Contact a Staten Island trusts lawyer to learn more.
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