COULD A TRUST PROTECT YOUR ELDERLY PARENTS' ASSETS?
On behalf of The Elder and Disability Law Firm, APC on Wednesday, May 22, 2019. No one wants to see their elderly parents' assets and resources be consumed by the state in order for them to qualify for Medi-Cal benefits. But health care costs continue to climb, meaning that senior citizens' savings can be depleted long before their lives end.If you are the adult child of a senior citizen, you may be able to help your parent(s) protect their assets with a trust. Why trusts are usefu...
No one wants to see their elderly parents' assets and resources be consumed by the state in order for them to qualify for Medi-Cal benefits. But health care costs continue to climb, meaning that senior citizens' savings can be depleted long before their lives end.
If you are the adult child of a senior citizen, you may be able to help your parent(s) protect their assets with a trust.
WHY TRUSTS ARE USEFUL
Trusts are quite useful on many different levels. They deter financial chicanery, as a trustee is the gatekeeper for all expenditures and disbursements.
Funding a trust also allows the grantor's heirs to avoid hefty probate fees they would otherwise face if there were just a will.
Trusts can also manage an elderly person's assets once cognitive problems or disability makes them no longer capable of handling their own affairs.
THERE ARE DIFFERENT KINDS OF TRUSTS
Not all trusts are created equally. Neither do they offer the same level of oversight and protection. Below are three different types of trusts:
Testamentary trusts - A spouse can arrange to have their assets at their death transferred into a testamentary trust for their surviving spouse. A trustee will oversee all financial decisions and transactions and make sure the elderly person has enough resources to live comfortably.
Revocable living trusts - These type of trusts allow the grantor to retain control of the trust assets. They can be altered or revoked entirely by the grantors without requiring the beneficiaries' permission. Grantors may appoint themselves or others as trustees and beneficiaries during their lifetimes and name successors for after their deaths. These trust become irrevocable trusts upon the grantors' incapacity or demise.
Irrevocable living trusts - Grantors may not alter or revoke these kinds of trusts without first getting permission from the beneficiaries. Senior citizens who want to qualify for Medi-Cal or other benefits can use this option to transfer assets.
SEEK PROFESSIONAL ESTATE PLANNING ADVICE
When you're ready to plan for your future needs or assist elderly relatives with their own estate plan, it's important to seek legal guidance to make sure that you choose the best options to preserve the most assets.