If you live in Montgomery, Ohio a trust lawyer can help you make the right choices so you can provide for all of your loved ones in the ideal manner. As a layperson, you would not be aware of all of your options, and this is why legal counsel is invaluable.
Let’s look at some of the reasons why you can benefit from the utilization of a trust of some kind when you are planning your estate.
Special Needs Planning
Many people with disabilities are Medicaid beneficiaries, and they can also receive Supplemental Security Income (SSI). These are need-based programs, and eligibility is not permanently granted. A change in financial status can impact eligibility for these benefits.
If you leave someone with a disability a direct inheritance through the terms of a will, they would be in a different financial position. This can cause a loss of their benefits, so it can seem like a challenging Catch-22 situation.
However, if you discuss the situation with a Montgomery, OH trust lawyer, you will learn about the supplemental needs trust. You can use this type of trust to provide for a loved one with a disability without impacting government benefit eligibility.
The trustee that you name in the document would be able to use the assets in the trust to make the beneficiary more comfortable in many different ways. This would not impact the beneficiary’s eligibility for benefits if everything is done properly.
Remarriage Inheritance Protection
When you are getting remarried as a parent, you may have concerns about the inheritances that you want to leave to your children. As a response, you can establish a qualified terminable interest property (QTIP) trust.
Your spouse would be the initial beneficiary, and your children would be the successor beneficiaries of the trust. If you die first, your spouse will receive distributions of the trust’s earnings, and they could use property that is held by the trust.
They would not have the power to change the terms at any way. After their death, your children would inherit assets that remain in the trust.
Nursing Home Asset Protection
Most senior citizens will need paid living assistance, and 35 percent will live in nursing homes. The median annual cost for a private room in a Cincinnati nursing home last year was $105,000, and 12 months is the average length of stay.
Medicare does not pay for the custodial care that nursing homes provide, and it does not cover professional in-home care. Medicaid will absorb these costs, but as we have touched upon with regard to special needs planning, you can’t qualify if you have significant assets in your name.
A nursing home asset protection strategy will typically involve the utilization of an irrevocable, income only Medicaid trust. After you fund the trust, you no longer have access to the principal, but you could receive distributions of the earnings that are generated by assets in the trust.
If you need long-term care at some point, the principal will not count if you apply for Medicaid coverage with one important stipulation. There is a five-year look back period, so you have to fund the trust at least five years before you apply for Medicaid coverage.
You are penalized and your eligibility is delayed if you violate this rule. The period of ineligibility is based on the amount of the transfer as it compares to the cost of long-term care.
For example, if you divested yourself of an amount that would pay for six months of nursing home care, your eligibility would be delayed by six months.
Take Action Right Now!
These are a handful of the scenarios that will call for the utilization of a trust, and there are a number of others. There are many tools in the estate planning toolkit, and when you work with a Montgomery, OH trust lawyer from our firm, you will be in a position to make fully informed choices.
If you are ready to put a plan in place, you can call us at 513-721-1513 to schedule a consultation appointment, and you can use our contact form if you would rather send us a message.