Accomplish more than is possible through a will
What is an irrevocable trust?
Many people are concerned about losing their house and life savings to long-term care costs. Irrevocable trusts are a relatively common estate planning tool that can help you accomplish some financial goals that are not possible through a will. We commonly establish this type of trust — which we call a closed box trust — for families looking for help prepare for the possibility of entering into long-term care facilities, for protection from legal liability, and other asset protection challenges.
If you need help with estate planning and asset protection in Maryland, the team from Chesapeake Wills and Trusts can offer advice based on your family’s unique needs. We can design a plan that provides peace of mind for your entire family. Contact us today to discuss your situation with one of our attorneys: 410-590-1900.
Understanding Asset Protection Trusts
Irrevocable asset protection trusts are often referred to as “closed box” trusts. Once the trust is created, the assets you wish to protect are retitled into the name of the trust, thus placing them in the trust “box”. To make the trust irrevocable, we place the lid on the trust, thereby immediately protecting your assets in the box from creditors.
At one point, irrevocable trusts were used as a tool to plan for reducing the taxes a person’s estate would have to pay at the time of his or her death. However as the Federal and State estate taxes have increased over the years, irrevocable trusts can now be used for asset protection, while providing the creator of these asset protection trusts greater ability to control the assets in the trust. For instance, in the right situation, the creator of the asset protection trust can still benefit from some of the trust assets and can still maintain control over the assets of the trust. Our estate planning team can meet with you and discuss your priorities and look at your family’s unique situation and determine if we believe an irrevocable trust would satisfy your estate planning objectives.
Some of the reasons you may need a closed box trust include:
- Separating personal assets from professional liability
- Protecting assets from a nursing home or other long-term care facility
- Medicaid planning
- Ensuring ongoing financial stability for family members with special needs
Our estate planning team can help you decide whether a closed or open box trust best suits your family and will help you define how and when you want your beneficiaries to receive assets from your estate. If you have special circumstances, we can help ensure you have a plan in place that gives you peace of mind.
Irrevocable Trusts Play a Key Role in Medicaid and Special Needs Planning
Many families who opt for an irrevocable trust as a part of their estate planning have special circumstances that require them to show they have few assets and income. Two of the most common include:
As a part of an advanced Medicaid planning strategy, we may be able to help you or a member of your family qualify for Medicaid benefits sooner and without having to spend down your assets. This is possible by moving the assets into a closed box trust.
If the irrevocable asset protecting trust is created well enough in advance of the need for Medicaid benefits, the assets in the trust would be protected from long-term care costs.
If you need benefits sooner, we may be able to help you put a plan in place that protects some of your assets. However, it will not be as effective as it would have been if we had put a plan in place earlier.
Special Needs Planning
Many people living with special needs rely on income- and asset-based government benefit programs to pay for their care and support. Leaving assets for a family member with special needs in your will or via many other estate planning tools may put these benefits in jeopardy. This could cause your loved one to face problems paying for food, housing, and medical care. They might also lose those assets to their care facility.
When we put the assets into a closed box trust instead, the assets never transfer into their name. This prevents them from causing a problem with most government benefit programs.
How we serve our clients in Anne Arundel County and all across Maryland
Planning for your own end of life, or a situation where due to disability you are unable to manage your assets, isn’t exactly comfortable. However, putting off planning can lead to more stress for your loved ones and unnecessary uncertainty around what happens to your estate.
Trusts are an estate planning tool we often use for asset protection, for providing a plan for the management of your assets upon your disability, and to help our clients’ families avoid the Maryland probate process.
A living will is a legal document that lays out what medical decisions you would like to be made in the event you are unable to communicate your wishes. This could include life-saving measures, pain management, organ donation, and more.
Whether your loved one has a clear estate plan, or no plan at all, the probate process adds unneeded stress to your life during a difficult time. Not knowing how the courts will distribute your family member’s assets can feel scary.
We believe everyone deserves the time they need to grieve the loss of a loved one and probate shouldn’t get in the way.
Learn more from our Maryland Probate Lawyers today.
A guardianship is the legal process used by the courts to appoint someone to make legal and financial decisions for people who cannot do it for themselves due to a physical or mental disability. If a guardian is appointed, the person subject to the guardianship loses the ability to make decisions for themselves for as long as they remain disabled.
Creditors may come after your home if you file for bankruptcy or if they win a lawsuit against you. If you believe this may be a possibility, we can help you put an asset protection plan in place that protects your family home. We can explain to you how an irrevocable asset protection trust works, and what this means for making future decisions about your property.
Last Will and Testament
A will, sometimes called a last will and testament, is a legal document that tells your family and the state your intentions for your assets after your death. We recommend all our clients draft a will. This is true no matter how small your estate or whether or not you use other estate planning tools to distribute your assets.
A common misconception after a loved one enters a nursing home is it’s too late to protect their assets and they’ll have to spend their life savings before they can apply for Medicaid assistance.
It's not too late! Our Medicaid Crisis Lawyers can help you protect your loved one’s assets and work to make them Medicaid eligible even after they enter a nursing home.
Powers of Attorney
A power of attorney grants another person the authority to make medical or financial decisions and act on your behalf. We create and use these legal documents for various purposes during the estate planning process, but the two most common are financial power of attorneys and health care power of attorneys.
Chesapeake Care Plan
Even the best-laid plans change. Laws are always being updated and changed. People move, get married, get divorced, have kids, and any number of other changes.
We created The Chesapeake Care Plan to keep your plan up-to-date so it will work as intended when you need it most. Better yet, by enrolling in the program, you’ll get a wide range of services at a fraction of the cost of what you would pay for them separately.
3 in 4 senior adults over the age of 65 will require long-term nursing care at some point in their life. Our Elder Law Lawyers offer estate planning, Medicaid crisis response, and other services to help senior adults plan ahead or respond to a crisis in health requiring nursing care.
You Control the Limitations on Your Closed Box Trust
A Will Provides No Asset Control During Your Lifetime
A will disposes of your assets after your death, while leaving your assets exposed to creditors and other long-term medical costs during your life. In addition, with a properly drafted trust, you can create your rules for how your assets are to be managed and protected if you become disabled or incapacitated during your lifetime.
Making Changes to an Irrevocable Trust
A common misconception about irrevocable trusts is that there is no way to make some changes to the terms of the trusts. Depending on your circumstances we can draft the irrevocable trusts to permit the creator of the trust to maintain control over the trust assets and have the flexibility to make changes to the trust, including who can benefit from the trust.
Contact Us Today to Learn More About Irrevocable Trusts in Maryland
At Chesapeake Wills and Trusts, our team offers the high-quality legal services that you and your family deserve. When it comes to irrevocable trusts and other estate planning tools, we know that your situation is unique to your family and your wishes. We always listen to your needs and preferences during this process.
We will explain your options in a way you can understand, and help you make the decision that will not only accomplish your goals but also give you peace of mind about your family’s future.
Call us today at 410-590-1900 to learn more about our estate planning services, to sign up for one of our workshops, or to make an appointment with a member of our team about your estate plan.
The Chesapeake Promise
When working with our team, you can expect us to:
Treat you like our own family
Always explain the next steps
Keep you in the loop
Work for your best interests
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