There are many substantial advantages to creating a trust. Trusts are powerful legal tools and, depending upon the kind of trust you create, you can protect assets, take care of heirs, plan ahead for incapacity, or accomplish other goals.
If you are thinking about potentially creating a trust, you should talk with an experienced attorney both about whether trust creation is a good choice for you and about what kind of trust you need to create. Nirenstein, Horowitz & Associates will provide you with comprehensive guidance on creating a trust so you can make informed choices. Not everyone is aware of the many benefits that trusts provide, but there are a few key signs that a trust may be an important legal document for you.
Signs That Creating a Trust is Right for You
You should talk with an experienced attorney about whether to create a trust, since everyone’s situation is different. Some key signs that trust creation may make sense for you and your loved ones include the following:
- You think you may need long-term care in a nursing home. If you need long-term care, Medicaid may be the only way to pay for it other than paying out-of-pocket since Medicare and insurance don’t cover routine nursing home care. A trust can allow you to protect assets while qualifying for Medicaid nursing home care coverage, despite Medicaid’s strict resource limits.
- You have heirs who are not responsible about spending. A spendthrift trust could allow you to protect an inheritance that you leave to heirs who are bad with money so their inheritance is not wasted right away or lost to creditors.
- You have disabled loved ones you want to give money or property to. Unless you use a special needs trust, your gift could end up disqualifying a loved one with a disability from receiving important means tested government benefits like Medicaid and Supplemental Security Income (SSI).
- You want to provide for a minor child. If you leave money to a minor and you don’t use a trust or follow provisions under the Uniform Transfer to Minors Act, the probate court could be forced appoint a guardian to manage the money for the child. If you create a trust, you have more control over who manages a child’s inheritance and what the money is used for.
- You want assets to transfer outside of probate. You can create a trust and transfer assets into it so those assets transfer through the trust administration process instead of the probate process.
There may be many additional reasons why you would need a trust, so you should talk with an experienced attorney to find out how trusts work under Connecticut law.
When Should You Create a Trust?
Depending upon the reason for creating a trust, you may need to complete your trust document and transfer your assets several years before you need the protections that a trust can provide. For example, if you are creating a trust in order to protect your assets in case you need Medicaid to pay for nursing home care, you will need to create your trust at least five years prior to applying for Medicaid— otherwise the transfer of assets into your trust could cause a period of disqualification under Medicaid’s five year lookback rule. This rule is aimed at preventing people from giving away property to get Medicaid coverage.
If you are using a trust to protect beneficiaries and assets in case of your death, it is also important to create a trust while you are still healthy and of sound mind. You never know when an unexpected injury or illness could leave you unable to create a trust. This would mean you and your family wouldn’t be able to take advantage of the benefits a trust provides to you.
There is no reason to wait, since trusts can provide so many benefits and since you could lose the ability to take advantage of protections provided by trusts if you wait too long. Give Nirenstein, Horowitz & Associates a call now to get started on the trust creation process.
Getting Help from A Connecticut Trust Creation Lawyer
Nirenstein, Horowitz & Associates can provide invaluable help with the process of creating a trust. Our legal team will work with you to determine what goals you hope to accomplish with trust creation and will help you to make a legally valid trust document that accomplishes that particular set of goals.
To find out more about how trust creation can help you, download our free estate planning worksheet. You can also give us a call at 860-548-1000 or contact us online to get personalized advice from a Connecticut trust lawyer on the trust creation process. Call today to get started.