When creating an estate plan, one of the benefits people look for is a way to protect assets from creditors, either theirs or those of their family. A Will does not protect your assets – it dictates your wishes and can include trusts that protect your beneficiary’s assets. Furthermore, a Will must go through probate. You can avoid probate and protect assets with certain types of trusts. A Georgia estate planning attorney can help you determine the best documents you need in an estate plan to ensure that all of your wishes are followed.
Irrevocable Trusts
If you want to protect your assets from your creditors, you must use an irrevocable trust. Once you transfer assets to an irrevocable trust, you no longer own the asset. Typically, creditors cannot go after the assets in the trust and the trust can provide protection from payments resulting from lawsuits.
Another benefit of an irrevocable trust is that you may be able to lower the estate taxes on your estate if your assets can be gifted and then appreciate outside of your estate or purchased in an irrevocable trust and never owned by you as is the case with irrevocable life insurance trusts. The use of irrevocable trusts to lower estate taxes is complex and requires coordination between you, your attorney and your CPA.
Special Needs Trust
Some irrevocable trusts also help protect government benefits that have asset or income limits associated with them. For example, a special needs trust can be put in place for a special needs person who must keep his or her income below a certain amount. They can still benefit from the assets in the trust without exceeding the required limits for government benefits.
Medicaid Asset Protection Trust
A Medicaid Asset Protect Trust (MAPT) is a type of irrevocable trust that is designed to qualify individuals for Medicaid. When a MAPT is created, you must transfer assets into it at least five years before you apply for Medicaid. As with all irrevocable trusts, there are specific rules regarding beneficiaries, use of assets, etc.
Contact a Georgia Estate Planning Attorney
If you need an estate plan and are interested in utilizing a trust to protect your assets from creditors or the costs of long-term care, contact our Georgia estate planning attorneys at Grissom Law, LLC today.
Disclaimer
This Blog/Web Site is made available for educational purposes only as well as to give you general information and a general understanding of the law, not to provide legal advice. By using this blog site you understand that there is no attorney-client relationship between you and Grissom Law, LLC.