Irrevocable Trusts

Upstate New York Irrevocable Trusts Lawyer

What is an Irrevocable Living Trust?

An Irrevocable Living Trust is created by a written agreement between you and the person you choose to manage the assets in the Trust. The terms of the Trust Agreement should be tailored to meet your specific needs and objectives.

On your death, your trust assets will be distributed directly to your named beneficiaries without the costs, problems, publicity, or delays of Probate.

The Language of the Trust Agreement is Critical

All of the assets in the Trust are governed by the Trust Agreement signed by you and your Trustee. The terms of the Trust Agreement are critical in order to protect assets in the event of a catastrophic illness. The state and federal Medicaid laws have stringent requirements pertaining to Trusts. Assets in Trusts failing to meet these regulatory standards will become vulnerable in determining Medicaid eligibility.

Children's Problems Do Not Affect Trust Assets

When assets are transferred directly to children, the children become the owners of those assets. Most of the risks and disadvantages involved in transferring assets directly to children can be avoided with a properly written Trust Agreement. For example, a well written Trust:

• will not result in income tax consequences for children.
• will not cause financial aid problems for grandchildren.
• will not cause trust assets to be vulnerable if a child is sued, involved in a divorce, or has other personal problems.
• will not result in gift tax liability

Supplemental Needs Trust as Part of Beneficiary Clause

A Supplemental Needs Trust is a trust which provides for a disabled person. Under this type of trust, the disabled person would receive distributions to supplement any benefits he/she was receiving from governmental programs. The disabled person would not be disqualified from receiving such governmental benefits. By making a Supplemental Needs Trust part of the beneficiary clause of an Irrevocable Trust, the disabled person will be quickly provided for without the delays and costs of Probate.

Irrevocable Trusts Can Minimize Estate Taxes

By establishing separate Irrevocable Trusts with the appropriate language, each spouse can obtain the federal estate tax exemption.

Irrevocable Trusts Provide for Asset Management in the Event of Incapacity

If you establish your own Irrevocable Trust and later become incapacitated, your designated Trustee manage your assets in the trust with virtually no difficulties. This allows for your estate planning investments to remain intact.

Irrevocable vs. Revocable Trusts

Under the Medicaid laws, any assets that you can withdraw from your trust are not protected. Medicaid will require you to use those assets towards the cost of care. A revocable trust does not protect your assets in the event of a catastrophic illness. Since you can revoke the trust, Medicaid can force you to revoke the Trust and withdraw all the Trust assets and use those assets towards the cost of care. The only type of Trust that will truly protect resources in the event of a catastrophic illness is an Irrevocable Trust where the language of the Trust Agreement appropriately complies with the federal and state Medicaid requirements.

If your objective is not to protect your life savings with the Trust, but rather it is only to avoid probate or minimize estate taxes, then a Revocable Trust might be more suitable. Long Term Care Insurance should also be considered.

The Medicaid Transfer Rules

A transfer to an Irrevocable Trust is subject to the Medicaid transfer rules.

Immediate Health Care Crisis

If you are in an immediate crisis, other estate planning options for asset preservation should be reviewed.

Advantages of an Irrevocable Trust

A Trust can serve a multitude of purposes depending on your desired objectives, such as:

• Asset protection for the Healthy Spouse and Family Members.
  
• Probate Avoidance.
  
• Avoid risks of placing assets in children's names.
  
• Estate Tax planning.
  
• Asset management in the event of incapacity.
  
• Peace of mind.

Koldin Law Center, P.C. with offices in Syracuse and Rochester, New York, helps families with loved ones suffering from catastrophic illness draft and manage irrevocable trusts. For over 30 years, the firm has been helping clients in Monroe and Onondaga counties and throughout upstate New York.

Contact our upstate New York irrevocable trusts lawyers to set up an appointment. The firm offers free initial consultations for all estate and Medicaid planning matters and flat attorney fees are very reasonably priced.