Benefits of a Trust Compared to a Will
This edition of the Koldin Law Center E-Newsletter is part of a series about the role of an Elder Law Attorney. In this newsletter we compare Trusts to Wills.
The Koldin Law Center, P.C. limits its practice to the specific field of Elder Law which includes estate planning and Medicaid law.
All prior newsletters are saved on our website. You can read them by clicking here.
The previous newsletters in this series compared how a general attorney would most likely handle preparing a Will versus how an Elder Law attorney would likely handle the initial client consultation discussion regarding preparing a Will.
Typical Will Consultation with an Elder Law Attorney
In addition to discussing the beneficiaries of your Will, the initial consultation at the Koldin Law Center would typically discuss:
(1) Options to avoid or minimize the need to Probate the Will
(2) Discuss if there are any special provisions that need to be included in the estate plan such as for family members with health issues or disability
(3) Accidentally disinheriting children/grandchildren
(4) Second Marriage complications
(5) Explain that a Will does not protect assets in the event of a long term illness and what planning can be done to accomplish protecting your life savings from the costs of long term care such as nursing home care.
In the previous newsletters in this series we discussed how Wills need to be probated, how probate avoidance methods can cause family members to be unintentionally disinherited, and how children in second marriages can be unintentionally disinherited.
Wills also do not protect your life savings in the event of a long term illness.
Unlike a typical consultation with a general practice attorney, a consultation with an Elder Law Attorney, such as the Koldin Law Center, P.C., will review with you the use of Trusts to accomplish various estate planning objectives regarding probate avoidance, unintentional disinheriting of family members, second marriage issues, and protecting assets in the event of illness.
Trust Created by Your Will to Provide for Your Spouse and then Provide for Your Children
You can leave assets in a Trust where your spouse would receive all of the income earned on trust assets, but the principal would remain in the trust.
If you wish, you can also give your Trustees the discretion to provide principal to your spouse or to pay certain expenses for your spouse.
Upon the death of your spouse, the balance would then go to your own children.
Example: John’s Will leaves everything in a Trust for Sally’s benefit and after Sally’s death, the remaining balance of the Trust goes to John’s children. Some examples of Trust terms to provide for Sally are:
(1) Give Sally all income earned (interest and dividends),
(2) Pay for all property taxes, insurance, and major repairs to the family home,
(3) Give the Trustees discretion to use principal on other expenses for Sally’s benefit if the Trustees determine that her own funds are not sufficient.
Sally also has a Will with the same terms as John’s Will, but on her death, she leaves the remaining balance to her children.
This example accomplishes the goals of providing for your spouse and also preserving the inheritance of your children.
It is important that John and Sally each select Trustees that they are confident will carry out their wishes.
John’s and Sally’s Wills must go through Court probate proceedings. Probate requires time and legal fees.
Revocable Trust
Another option to avoid probate and to provide for your spouse and avoid your children from being unintentionally disinherited is for each spouse to establish his/her own Revocable or Irrevocable Living Trust.
Example: John establishes a Revocable Trust naming himself as Trustee. On his death, John’s children become the Successor Trustees. If his Wife, Sally, is still living, the Trust continues for the benefit of Sally. After Sally’s death, the remaining balance of the Trust goes to John’s children.
Sally also has a Revocable with the same terms as John’s Trust, but on her death, her own children become the Successor Trustees. Her Trust continues for John’s benefit and then the remaining balance after John’s death goes to her children.
This example accomplishes the goals of providing for your spouse, preserving the inheritance of your children, and avoiding Probate.
It is important that John and Sally each select Trustees that they are confident will carry out their wishes.
A Revocable Trust does not protect your life savings from Medicaid if Nursing Home care becomes necessary.
Irrevocable Trust
To accomplish the same objectives described above and protect your life savings from the cost of long term care and qualify for Medicaid coverage, each spouse could establish an Irrevocable Trust.
For a complete discussion of Trust planning, see our website by clicking here.
For more information about a Last Will and Testament, please visit our website by clicking here.
At the Koldin Law Center, P.C., located in East Syracuse, New York, we have over 50 years of experience helping individuals plan for immediate crisis and long term care. Our attorneys are available to discuss your estate planning options, including the advantages and disadvantages of Revocable Trusts and Irrevocable Trusts, along with other estate planning considerations including a Will, Power of Attorney, and Health Care Proxy.
When the Koldin Law Center, P.C. handles a Medicaid case, we not only handle the entire application process, but we also review asset protection options with our clients. We review with our clients who are already in a Nursing Home options to protect some or all of their assets beyond merely establishing Medicaid eligibility.
We do not charge a fee for the initial consultation. We welcome your children, family attorney, accountant, and/or financial planner to be present at the initial consultation.
There is something you can do.
Our Attorneys are available to speak to your organization
Our Attorneys speak to groups throughout New York State as a public service. If you would like to arrange for one of our Attorneys to speak to your group, please contact our office.
We appreciate your referrals
We have been told by many clients who are in a crisis that they wish they had known about our firm much sooner. We are proud of the many families we have helped in times of crisis.
We are also proud of the many families we helped avoid financial crisis by doing estate planning in advance.
We all share the responsibility for making our family and friends aware of the planning options available to them.
Your referral to the Koldin Law Center could make a major difference in the lives of your family and friends if they are someday faced with a long term illness.
Remember that the Koldin Law Center offers many services for clients of all ages. Our services range from basic estate planning such as a simple will to complex estate planning including asset preservation planning.
THERE IS NO FEE FOR THE INITIAL CONSULTATION
