Wills & Living Trusts
Proactively Planning your Family’s Future
Proactively planning your family’s wills & living trusts is the best way to ensure their future. However, with estate planning, people often hesitate to plan ahead. At DuBois Law Group, PLLC, we strive to make the planning process relaxed, comfortable and custom tailored to each family.
An “estate plan” can take many different forms. Most people understand the need for a Last Will and Testament, to appoint an Executor and direct the distribution of their assets. Many people are beginning to hear about trusts and to effectively a properly drafted trust can be to accomplish their goals. The most prevalent of which tends to be protecting assets from being spent down on long term care.
At DuBois Law Group, PLLC, we have a specific process to work with our clients to ensure that their plan is right for them. For most families that own their home and have savings, it involves a will or a living trust. This can prevent families from spending down those assets on long term care. Planning ahead will help to organize their affairs in case of death and avoid the bureaucratic and time-consuming probate process.
Making a Living Trust
Planning ahead means future Security
At DuBois Law Group, PLLC, we work with families every day where families don’t plan head which leads to severe stress, expense and overall turmoil. There are options at that point, but they are limited; it is rarely an ideal option when there is not a lot of time. Making a living trust is crucial to prepare for your family’s future security. Preparing for the future early may not be ideal but, it ensures a stress-free transition. We are happy to assist families in any scenario regarding wills and trusts. We would much prefer to work with families proactively planning a will or trust to ensure a less expensive, result.
Proactive planning allows families to ensure, with the highest degree of certainly possible, that the house they’ve paid off and the money they’ve saved up will stay with whatever people or charities they choose, exactly in the manner they want.
Spouses will not have to wonder whether they can afford their lifestyle if long term care is needed. Children whose parents worked hard their whole lives will not have to see their parents’ savings get spent down, while the children of wealthy families remain comfortable inheriting millions. Children that do inherit their parents’ respectable savings will not have to see it lost to a divorcing spouse or spent down on their own medical needs. A well-thought-out plan protects against all these issues and does so in a way that is tailored precisely to the people involved.
Faq about Proactive wills & trusts
What is a trust?
A trust is a type of legal entity which is helpful to think of as a bucket that holds your assets. In most cases, the person or people putting the assets into the trust is also the person or people that are in charge of managing the trust (the “trustees”).
What’s the difference between a revocable trust and an irrevocable trust?
A revocable trust or living will, can be canceled, dissolved, scrapped--whatever term you like--at any time. It can be revoked, the assets can be taken back, or more commonly, it can be amended in any way you like. This might seem like the clear option, except that a revocable trust does not protect assets from long term care or anything else. Its primary benefit is avoiding probate and otherwise making administration upon death easier. This makes it a reasonably option for people with enough assets to pay privately for long term care, or perhaps people with very good long term care insurance policies that would cover long term care costs. An irrevocable trust cannot be revoked simply upon a whim. It is set in place permanently, and usually restricts access to the assets you put in it. Those two aspects: that it is irrevocable and that you cannot “spend” its assets (though you still can control them), are primarily what cause those assets to be protected from long term care costs. It is comforting that in New York, the law does permit the trust to be revoked under certain circumstances. That means that people can enjoy the protective benefits of an irrevocable Medicaid trust, but if they really need to, they can revoke it. This is not something we expect when we set up the plan, but it’s nice to know that it’s an option.
What can I put in a trust?
A trust can take title to almost anything a person can. A house, other real estate, bank accounts, investment accounts, stocks, bonds, life insurance, business interests, some annuities, personal property, etc. The most notable asset that you cannot put in a trust is a retirement account (401(k) or IRA). Changing the title on a retirement account counts as a full distribution which would cause the entire amount to be taxed as regular income.
Can I still use the assets I put into a trust?
If it is a revocable trust, then yes, absolutely--but remember, revocable trusts offer no protection against long term care costs. If it is an irrevocable trust, for the most part, you cannot spend the assets in it. That is, you cannot use them to pay for your daily expenses, care costs, any typical cost of living. If your irrevocable trust is set up to permit access to income, and it holds assets that generate income (stock dividends, investment real estate, interest on investments), you can freely spend that income, but not the principal. However, it is often the case that you can be your own trustee and manage those assets, such as how they are invested. When setting up an irrevocable trust, it is important to have a thorough discussion about what assets you should put in it, since you cannot use those assets for normal spending. You should never put all your assets in an irrevocable trust--only those that you do not plan on spending. The biggest asset people usually don’t intend on spending is their house, and often some savings or investments. A well-done plan takes into consideration a family’s income and expenses to help guide us on what assets should be protected, and which should be left outside of the trust, in case they are needed to support your lifestyle.
If I put my house in a trust, can I sell it?
Yes. A house in a trust can absolutely be sold. If the trust is an irrevocable trust, such as a Medicaid trust, the proceeds of the sale must be paid to the trust. However, the trust could then purchase another home, such as in the case of someone that wants to downsize into a smaller house.
If I put my house in a trust, will I still get my STAR, Veteran’s, Enhanced STAR or other property tax exemptions?
Yes. As long as the trust is drafted properly, a house in a trust qualifies for all the property tax exemptions it would qualify for if it were owned personally. This counts for almost all tax considerations, including capital gains tax.