Irrevocable Trusts2018-10-05T23:47:30+00:00

Project Description

Irrevocable Trusts

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:

Medicaid Planning

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.

You Control the Limitations on Your Closed Box Trust

Many people worry about the limitations that come with irrevocable trusts as you are handing over a lot of control when it comes to your assets. However, if the trust is created to protect your assets from creditors and long-term care costs, the person creating the trust may still maintain some control and benefits from the trust. We can walk you through every step of the process, allowing you to make each decision that comes up, choosing the option that best suits your family.

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.

Learn How to Protect Your Home, Family and Life Savings. Order Your FREE Book Now!