A lot of people have misconceptions about estate planning. They think that your choices are limited, and everyone involved will be required to adjust. The idea is that you pass along your assets in a will, and everyone is on their own after they receive their inheritances.
Many of these folks assume that trusts are only for extremely wealthy people that have very complicated estates. In reality, this is really not the case. There is an ideal approach to address any situation, and we will look at some examples in this post.
Special Needs Planning
Individuals with special needs often rely on Medicaid for health insurance, because they don’t work, and they can’t get coverage through their employers. Since they have limited financial resources, they qualify for Medicaid coverage, and they also receive Supplemental Security Income.
A change in financial status can result in a loss of eligibility. This would be a source of concern if you want to provide for a loved one with special needs in your estate plan.
Fortunately, there is a very effective solution in the form of a supplemental needs trust. To provide a brief explanation, the assets in the trust are never owned by the beneficiary. The trustee is empowered to use the resources to enhance the beneficiary’s quality of life in many ways. As long as everything is done according to the rules, there will be no benefit disruption.
Pet Ownership
Seniors often experience loneliness, and if you are in this position and you are an animal lover, pet ownership would probably come to mind. In addition to the companionship, if you have a dog, you have a reason to take walks. This is good for your mental and physical health, and you may meet some fellow dog owners when you’re out and about.
There is a renewed sense of purpose, and a dog will let you know when there are strange sounds outside the door. The benefits are clear, but there is the longevity factor if you bring a pet into your home as a senior citizen.
Under these circumstances, a pet trust can facilitate responsible pet ownership. If you predecease your pet, the trustee that you name will follow instructions that you record in the trust declaration. Your pet will be cared for in accordance with your wishes if it becomes necessary.
Spendthrift Protections
It can be disconcerting to leave a lump sum bequest with no asset protection or strings attached if you will be leaving an inheritance is someone that is not good with money. They could burn through it too quickly with nowhere to turn for assistance when they really need it.
If you are in this position, you could establish a living trust with a spendthrift provision. You would control the assets while you are living, and you would name a trustee to manage the trust after your death.
When that time comes, the trust will become irrevocable, and the spendthrift beneficiary would not have direct access to the resources. Their creditors would be in the same position, so the assets would be protected.
The trustee would provide monetary distributions to the beneficiary in accordance with your wishes. For example, you could set a monthly amount that is comprised of the interest that is generated. In the trust agreement, you could allow for larger distributions as the beneficiary gets older.
Take Action Today!
If you are currently unprepared from an estate planning perspective, qualified assistance is just a phone call away. We can gain an understanding of your concerns and your objectives. After we understand the situation fully, we can provide recommendations so you can make fully informed decisions. Ultimately, your plan will be carefully constructed to cover all your bases effectively.
You can schedule a consultation at our Glastonbury or Westport, CT estate planning offices right now if you call us at 860-548-1000, and you can use our contact form to send us a message.
Mr. Horowitz was awarded his Juris Doctor degree with honors from the University of Connecticut School of Law. While attending law school, Mr. Horowitz received the American Jurisprudence Award in Legal Ethics and the Nathan Burkan Award.
After graduation from law school, Mr. Horowitz continued his legal education at New York University School of Law where he received a Post Doctorate Law Degree in Taxation. He has also recently received a national achievement award.
Mr. Horowitz is admitted to practice before all the state courts in the State of Connecticut and the United States District Court.
Mr. Horowitz was selected for Super Lawyers in 2021.
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