Using a trust as a way to protect assets in estate planning

Protecting your assets as you age and for the people you love after you die is complex. There is no single solution that works in every scenario. Depending on your age, the kinds of assets you own, and your legal and medical situation, a variety of solutions can offer you financial and legal protections.

For many people in a broad range of familial circumstances, the creation of a trust can be a great way to protect assets for the future. Properly funded trusts can offer benefits to heirs and beneficiaries that last a lifetime. Well-planned trusts can also offer protections to the creator ranging from tax benefits to the ability to access state benefits such as Medi-Cal.

Once an asset is in a trust, it doesn't belong to you anymore

The primary way that trusts protect your assets is quite brilliant. You and several other people can retain control over the trusts. That means that you have the right to access and disburse assets from the trust if necessary.

However, those assets won't be vulnerable to the actions of private creditors or the government in most cases. A trust can help someone qualify for Medi-Cal, provided that your assets get moved into a trust at least 30 months prior to the application process. A trust also ensures that the government can't seize your assets to repay benefits after you die.

In the event of creditor lawsuits or other issues as someone ages, a trust offers protection there as well. Because the individual does not own the assets held in trust, the creditors typically cannot access them.

Trusts give you control over dispersal

Are you worried that your loved ones might squander your assets, spend them on addictions or fail to plan properly for the future? Do you have any special needs family members? If you answered yes to either of these questions, creating a trust may also provide you with peace of mind.

A special needs trust can help provide income and protections for a loved one in the future while also ensuring that they can qualify for necessary state aid programs. A spendthrift trust or similar trust can limit the control and access that heirs with problematic habits and issues have to the inheritance you wish to leave them.

Every person's last wishes are unique, and your reasons for needing asset protection or considering a trust are also unique. Sitting down to talk with an attorney is the best way to determine what options will work for you in your situation. No solution is truly one-size-fits-all when it comes to estate planning and the law in California.

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On behalf of The Elder and Disability Law Firm, APC posted in trusts & trust administration on Monday, July 8, ...
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