Revocable living trusts are a good estate planning solution for many people, and this includes those who would not consider themselves to be wealthy. However, there are things they can and cannot accomplish and we would like to provide some clarity here.
A revocable living trust is indeed revocable in a literal sense, so you can change the terms or dissolve the trust if you choose to do so.
Most people also act as both the trustee the beneficiary while they are still alive so they retain complete control of the assets.
When you arrange for the transfer of assets to your loved ones after your passing through the creation of a living trust these transfers will take place outside of the probate process. Because probate can be time-consuming and costly this is another appealing aspect.
And, you could include an incapacity component naming a disability trustee who would handle your financial affairs in the event of your incapacitation.
Those are the things that a living trust will accomplish for you. What a living trust cannot do is protect assets from creditors or claimants.
Because you do indeed retain control of the assets in the trust while you are alive you are retaining incidents of ownership. As a result, these resources are considered to be yours and they can be targeted by interested parties.
The assets that you place into the trust are also considered to be part of your holdings if you were to attempt to become eligible for Medicaid as a way to pay for long-term care.
Individuals who assume that assets placed into a living trust will not be counted by Medicaid are mistaken.
Though living trusts have their limitations there are other steps that can be taken to protect assets and plan ahead with Medicaid eligibility in mind. If you are looking for answers simply take a moment to arrange for a consultation with a good Hartford estate planning lawyer.