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4 Signs It Is Time To Consider A Trust

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  1. One or more pieces of real estate. Substantial retirement assets.
  2. Aging & Health Problems.
  3. No Long Term Care Insurance.
  4. Blended Family.

 

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Transcript:

Greg McIntyre, Estate Planning/Elder Law Attorney:

Hi, I’m Greg McIntyre with the Elder Law Report and we’re going to talk about a very important topic today, four signs it might be time to consider a Trust. Four signs that you need to look for that might indicate you need a Trust, because people often don’t know if they need a Trust, a Will or what kind of Estate Planning document and mix and plan that they need. We’re going to give you some insight today on why you might need a Trust and why you might not need a Trust. [inaudible 00:00:41] Side that you might need a trust is that you own more than one piece of real estate. In addition, maybe you have financial retirement assets. Let’s talk about that, how does wealth and property accumulation become a sign` that you might need a trust.

Brenton Begley, Estate Planning/Elder Law Attorney:

Well, number one, the more property, the more wealth that you have, the more you have to lose. And if you allow your assets to pass through the probate process, then they are subject to more risk than if you kept them out of that process. So, that’s, that’s number one, and that’s something that I like to remind people of that no matter what kind of trust you get, you avoid probate, okay? The other thing is, the more property and the more wealth you have, again, the more you have to lose during your life, not just at your passing. So if you are an individual over age 65, you have a 70% chance of needing some type of long-term care in the future, which is a huge risk to your assets because long-term care can cost anywhere from $10,000, $15,000 a month. It could be hundreds of thousands of dollars a year. So that’s something that you should certainly consider, even if you’re able to get Medicaid, qualify for Medicaid, that does not mean that your assets won’t be subject to risk.

            So a trust can be a very good tool to use, to protect those assets from probate, from the nursing home and from any type of benefit program like Medicaid that may cover your long-term care can also help you qualify for much needed benefits to qualify and pay for that long-term care.

Greg McIntyre, Estate Planning/Elder Law Attorney:

So let me ask this, Brendan, what about liability protection for someone with more than one piece of property or some substantial retirement assets? Does the Trust offer liability protection?

Brenton Begley, Estate Planning/Elder Law Attorney:

It does, and again, there’re multiple ways to set up a Trust, but if you’re worried about liability protection, you’re worried about getting sued and losing this property you’ve worked hard all your life, maybe some other types of cash assets or liquid assets, a Trust can be a great shield to protect you from personal liability now. [crosstalk 00:03:18]

Greg McIntyre, Estate Planning/Elder Law Attorney:

But what about tax protection or maximizing tax benefits?

Brenton Begley, Estate Planning/Elder Law Attorney:

I’m glad you brought that up. I’m surprised you brought it up and I didn’t bring it up. I thought I was the Tax guy. Yeah, so tax protection, we have something that’s looming over our heads that a lot of people don’t know because we’re in a little bit of a grace period right now, but the Death Tax is coming back. Okay. That’s a drum I’ve been beating for a while, letting everybody know that, hey you might not have to worry about estate and inheritance tax right now, but that’s coming back and Trust can be a great tool to prevent your estate from being depleted by 40,50%, right? Percent tax rate, okay. Agents, significantly deplete your estate, if your estate is subject to that tax rate and a Trust can help you totally avoid that.

Greg McIntyre, Estate Planning/Elder Law Attorney:

So thank you very much Brendan. The second sign that you might be time to consider a trust, you’re having some health problems and you’re aging. You’re getting up in years, you’re past retirement age or you’re at retirement age or older and starting to experience some health problems or might be concerned that they’re on their horizon.

Brenton Begley, Estate Planning/Elder Law Attorney:

Right.

Greg McIntyre, Estate Planning/Elder Law Attorney:

Why, if you’re aging and the older you get, is that an indicator and why coupled with health problems, is that a real arrow that should point you to consider a Trust, to pass your assets and protect them?

Brenton Begley, Estate Planning/Elder Law Attorney:

Well as I mentioned before, [inaudible 00:05:03] is an ally for a lot of people, the majority of people. That’s a big deal, it costs a lot. Medical bills in general can totally deplete an state after someone’s passed away, especially if that estate is going through the probate process. So if you want to prevent the inevitable medical bills that you will incur in the future from the depleting your estate, then a trust is a great tool to do that sort of thing. So if you know that you have health problems, if you know that you’re getting up there in age and so you’re more likely to have health problems, including the need for long-term care, then a Trust is not only going to help you qualify, but help you, protect, shield assets from being taken by these creditors that you can incur. And when I say creditors, I mean these medical creditors, like the nursing home, hospital bills, things like that, and help preserve these assets for the next generation.

Greg McIntyre, Estate Planning/Elder Law Attorney:

Agreed, agreed, excellent answer. Thank you so much. And [inaudible 00:06:06] is, very good job, very good job. So number three, signs that its time to consider a Trust, you have no long-term care insurance.

Brenton Begley, Estate Planning/Elder Law Attorney:

Yeah. A lot of people don’t, a lot of people don’t have long-term care insurance. Some people don’t even know what it is, and that’s not your fault because no one’s out there telling you that these things exist. So long-term care insurance is exactly what it sounds like, it’s insurance to cover the cost of long-term care. If you ever go into long-term care, now there’s different insurance policies, there’re different ways that you can qualify. You might not qualify if you have a preexisting condition or over a certain age. So for that reason a lot of people don’t have it. Also, you might not be able to afford the premiums, even if you do qualify. So that being said, if you don’t have long-term care insurance to cover the cost of long-term care, you have to have an alternative plan to protect your assets and pay for long-term care. And a Trust is just such a good tool to do both of those things, as, as we’ve mentioned before.

Greg McIntyre, Estate Planning/Elder Law Attorney:

And we draft some particular trust that are made just for that, to shield assets from, and from a creditor recovery, as well as to make them not accountable asset, should you have to apply for, say a Medicaid benefit to pay for long-term care in the future. We drafted a couple of trusts that are just perfect for that. And number four, signs that you might need to consider a trust, are that there’s a blended family.

Brenton Begley, Estate Planning/Elder Law Attorney:

Right.

Greg McIntyre, Estate Planning/Elder Law Attorney:

So what if there’s a blended family?

Brenton Begley, Estate Planning/Elder Law Attorney:

Yeah, this is a big deal. A blended family means that maybe two families came together after a wife and husband have both had kids, maybe even grandkids, and they come together and get married later on in life. And so there’s this mixture of these families. Sometimes they get along, sometimes they don’t, but because of that lack of family history, you might have tensions after someone’s passed away. You don’t want your estate to get tied up for years and some type of Will challenge, in some type of probate litigation. So a Trust can solve that problem just easily. Very simply, just like that. You know, it can allow the spouses to dictate what happens to their share of their assets that they’ve already built up over their lives, maybe even inherited from their spouses. If their spouse passed away, maybe they’ve inherited it from their family members, things like that, things that were always supposed to go to their children, you can make sure that still happens so when one passed away, it isn’t just a Battle Royale for the assets that are up for grabs.

            So that’s a very important reason why you might want to consider a trust to just take that burden off your family.

Greg McIntyre, Estate Planning/Elder Law Attorney:

So thank you so much, Brendan, for explaining the four signs it’s time to consider a Trust. To recap, if you own more than one piece of real estate or have substantial retirement assets, if you have aging or health problems, if you don’t have long-term care insurance, or if you have a blended family. Thank you for tuning in the Elder Law Report, and we’ll see you next week.

 

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