Common Misconceptions–Part 3
The Koldin Law Center, P.C. is excited to announce that our website has been completely revised. Please check www.koldin.com to see what we have done!
This edition of the Koldin Report E-Newsletter is Part 3 of a series about common misconceptions about Elder Law, Estate Planning and Medicaid.
The attorneys at the Koldin Law Center meet with clients every day. We have seen a pattern of misconceptions and misunderstandings that can have catastrophic effects on families. The following is a list of the most common misunderstandings that clients present to our office.
I don’t have enough money to do a trust.
This is one of the most common and unfortunate misconceptions that we hear. Surprisingly, many of our clients receive this advice from their financial planners or family attorneys. Our office often creates a trust for only the family residence. If a single person went to a nursing home, the current law requires that he/she spend down the assets, including the family home, to $14,400. If the house is placed in a specially designed family trust, the house would not be deemed to be an available resource and would be protected.
I lose control if I set up in an irrevocable trust.
The purpose of the trust is to protect your assets for your benefit while still giving you as much control as possible. Without proper planning you could lose your home and life savings. At the initial consultation we review the trust and your options.
It is better to simply transfer my assets to my children.
Many attorneys are not familiar with the specially designed family trust and encourage their clients to transfer the family home and other assets directly to the children. There are many pitfalls to transferring the home or other assets to the children that could put your life savings in jeopardy such as:
(1) Bankruptcy of a child
(2) Lawsuits involving a child
(3) Divorce of a child
(4) Death of a child before a parent
Furthermore, transferring your assets to your child could have negative tax consequences for your child and the potential loss of college financial aid for your grandchildren.
I thought my assets were protected. I have a revocable trust.
We have many clients coming to us with trusts prepared by other attorneys. Many of these clients are under the impression that their assets are protected when they have done a revocable trust in the past. A revocable trust can be an excellent planning tool for the right client, but it is important for the client to understand that a revocable trust does not protect assets in the event Medicaid is needed. Assets in a revocable trust are all deemed available to the creator of the trust.
At the Koldin Law Center, P.C. with offices in Syracuse , New York, we have over 40 years of experience helping individuals plan for immediate crisis and long term care. You should never assume that it is too late. Quite often you have legal options to save some or all of your life savings. The Koldin Law Center, P.C. can help you make the right decisions when you have a health care crisis. There is something you can do.