TrustsBasically a trust is a legal Contract that can control all or part of your assets, Protect them from outside sources and direct them after death or other event.There are 2 types of trusts, Revocable and Irrevocable, but there can be a lot of stipulations to create other types, such as Revocable on 'Event'.Revocable is good for a parent to set aside assets for a child (or other) while the parent is still alive and wishes to retain some control of the assets in the future. Irrevocable means the trust Maker cannot change the direction or terms of the trust after it is signed. Appointing a Trust Manager and the circumstances that the trust would be Dissolved are important.So I am speaking mostly about Irrevocable trusts for Seniors. A trust supersedes a Last Will, but does not replace it, it can effectively change the terms of a Will. The idea is to turn over ownership of All assets (really, everything) over to the trust and allow the trust to pay for all the necessary living expenses of the Trustee. Remember this is a Contract, so it can be set up in any way that you choose (there is no such thing as a boiler plate trust) but it cannot be changed. You must envision every eventuality that could occur during the life of the trust. Also the trust should have a dissolution clause, ie on the death of Parent all assets, after paying all debts and final expenses, will be transferred like in kind to the heirs named in the will. (did you notice I included a lot of specifications? it's a Contract!)A trust will protect the estates assets from Medicare, Medicaid and predatory claims as long as it has been in effect for 5 years (in current law) so effectively the Trust Beneficiary is broke, but cared for by the terms of the Trust I would recommend a trust for anyone with assets over $100k or owns a house property or business. When an Elder requires a nursing home, it is really easy to run through all assets in a short amount of time. At 60 to$ 90k/year for skilled nursing care, I'm sure you can see why. Long Term Care insurance may help, but I am not familiar with that. Medicaid will cover nursing care if the person has less than $2000 in assets. For over that amount, Medicaid requires payment or partial payment until the assets are less than $2000. Any trust less than 5 years old is considered an attachable asset as well as gifts given less than 3 years ago (this law may change soon)For me, this information is to late. So I am hoping someone else can benefit from it.jC
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