Putnam County Irrevocable Trust Attorney
Secure Your Wealth Through Strategic Irrevocable Trust Planning
Suppose you are unaware of the benefits of an irrevocable trust. In that case, you are most likely missing out on an effective way to protect your assets and help your family members avoid probate. Irrevocable trusts also offer numerous advantages that can protect future generations. As many New Yorkers age, they begin to worry about nursing home costs and how they will protect their assets should they require extended medical care.
The Feller Group, P.C. is a Putnam County law firm dedicated to helping clients navigate the estate planning process, enabling them to feel confident about what lies ahead. No matter your age or circumstances, you can benefit from consulting with one of our dedicated estate planning attorneys who can answer your questions. Contact our law offices today to schedule a free, 30-minute case evaluation, and we will determine how we can assist you.
How Can I Benefit From Creating an Irrevocable Trust?
Many New Yorkers are under the mistaken impression that trusts are only for older adults or those who have significant wealth. Some of the most considerable benefits that are offered to those who create an irrevocable trust include:
- Asset protection: Once assets are transferred into a trust, they are no longer considered to be your property. Because the assets are retitled into the name of the trust, they are shielded from lawsuits and creditors
- Avoid probate: In addition to asset protection, the property placed in the trust is also exempt from probate since it is no longer legally recognized as your property
- Medicaid planning: Medicaid asset protection trusts can help to protect your hard-earned assets as long as they have been placed in it for at least five years to meet Medicaid’s strict five-year look-back eligibility requirements
- Special needs planning: If you have a child with special needs, creating an irrevocable trust is an ideal way for them to have access to financial resources without jeopardizing their ability to collect government benefits
- Estate tax reduction: Assets placed in an irrevocable trust are exempt from your taxable estate, which can significantly reduce any state or federal taxes that your beneficiaries would otherwise be forced to pay
What is the Difference Between a Revocable and an Irrevocable Trust?
Many individuals are often uncertain of the differences between revocable and irrevocable trusts. Although there are many differences, the primary distinction is that a revocable trust does not provide the same level of asset protection as an irrevocable trust.
A revocable trust is often the ideal choice for individuals seeking a way for their heirs and beneficiaries to avoid the probate process. Even so, because a trustor, the person who created the trust, still has access to the assets in the trust, it does little to protect them against lawsuits or creditors.
Because the trust assets are still considered to be the trustor’s property, they are also subject to personal income tax. Conversely, depending on how an irrevocable trust is structured, the assets it contains may be exempt from taxation.
One of the most significant benefits that an irrevocable trust offers over a revocable trust is its impact on Medicaid planning. With the help of a skilled estate planning attorney, individuals can place assets in Medicaid asset protection trusts that can protect them from being seized by the state’s Medicaid Estate Recovery Program (MERP), provided they meet the eligibility requirements.
If you have further questions about the differences between revocable and irrevocable trusts, please contact The Feller Group, P.C. We will be glad to answer your questions.
How Does an Irrevocable Trust Help With Medicaid Planning?
A substantial benefit of an irrevocable trust, specifically a Medicaid Asset Protection Trust (MAPT, is that it can help with long-term care planning. As they grow older, many individuals worry about how to pass their hard-earned assets on to future generations.
Structured correctly, an irrevocable trust allows an individual to transfer assets out of their name to meet Medicaid’s strict eligibility requirements. To qualify, assets must be placed in an irrevocable trust by a lawyer at least five years before applying for benefits. Medicaid has strict guidelines regarding its five-year look-back rule. Once the five-year look-back period has lapsed, assets placed in the trust are typically not considered countable assets.
Because you relinquish control of your property, all assets placed in the MAPT are managed by a trustee. An added benefit is that the trustor can also receive income produced by trust assets, such as interest or dividends from investments. The trustor can also continue to live in their family home if it is placed in the trust.
Can an Irrevocable Trust Ever Be Modified or Terminated?
One of the primary concerns of many clients is whether an irrevocable trust can ever be changed or modified. Under specific circumstances, an irrevocable trust can be changed or modified. Still, you must consult with an experienced irrevocable trust attorney to ensure compliance with applicable laws.
Some of the most common methods that can be used to modify or terminate irrevocable trusts:
Trust Decanting
A trustee can transfer trust assets to a new, modified trust. Typical factors leading to trust decanting include changing beneficiary terms, adjusting the powers of the trustee, or modifying administrative provisions
Non-Judicial Settlement Agreements
A trustor can terminate an irrevocable trust if they obtain the consent of all parties who have a beneficial interest in the trust. New York State law allows individuals to make non-judicial settlement agreements to resolve common issues, such as determining trustee compensation or interpreting trust provisions.
Court Proceedings
Depending on the circumstances involved, a trustee may need to petition the court for a modification of the terms. One fact to keep in mind is that court proceedings can be costly and time-consuming, and are generally reserved for significant issues that are occurring with the trust.
Additional circumstances that may warrant a change include major life events such as marriage, divorce, birth of a child, correcting errors in the trust document, or adapting to changes in tax laws.
Contact Our Estate Planning Attorneys to Help You Secure Your Financial Future
The Feller Group, P.C. is a Putnam County law firm that is intensely focused on helping families secure their financial future. We recognize that there is no one-size-fits-all solution when it comes to estate planning and creating irrevocable trusts. When you come to us for legal assistance, we will professionally evaluate your needs and craft a custom strategy that meets your objectives.
Suppose you are concerned about the cost of nursing home care, naming a new successor trustee, or other legal issues related to an irrevocable trust. In that case, you need an attorney who can help you make informed decisions. Our attorneys are ready to provide you with the knowledgeable guidance needed to feel confident about what lies ahead. Contact our law offices today at 845-682-5572 to schedule a free, 30-minute case evaluation.