Has this happened to you? There is often a point in a person’s life when he looks at his children and grandchildren, starts thinking about how hard he worked to build his house or his business or his savings and investments, and wonders as he ages whether he will be able to still provide a financial legacy for his children. In particular, he may be worried that if he ever develops Alzheimers Disease or requires nursing home care, there will be nothing left to pass on to the next generations. This is what asset transfer planning is all about.
Decisions about transferring assets need to take into account many variables, such as the age, health and income of the senior citizen and his ability to take care of his needs once assets have been transferred. Of course, he should be sure to consider the impact of asset transfers on his later eligibility for Medicaid should he actually need nursing home care. Additional considerations would be the situation with the children or grandchildren themselves. Is the child at risk of divorce or pursuit by creditors? Are any of the family members disabled or dependent on government programs like SSI or Medicaid or DDD where eligibility depends on the finances? Is a child a spendthrift so that giving them assets will likely result in the assets disappearing in no time? Family trusts can be a very good method to set aside assets for the family members for the long term.
The beauty of a family trust is that the assets are controlled and managed by a trustee, which can provide a layer of protection for the beneficiary. The trust can be written in a way that deals with the unique issues in the family. Special needs restrictions can insulate the assets and preserve a beneficiary’s eligibility for Medicaid or other programs. And the trust can direct just who would receive that share of the trust assets in case of the death of a beneficiary, so that the assets don’t become part of the beneficiary’s estate.
While it may be more cumbersome for assets to be managed in a trust rather than just be transferred outright to family members, there are so many opportunities to provide extra protection that the aging family patriarch or matriarch may well want to consider the use of a family legacy trust for the long-term good of the family.
Call us for family asset protection planning, and estate & elder care trust planning … 732-382-6070