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RayAnswers
RayAnswers, Attorney
Category: Estate Law
Satisfied Customers: 36960
Experience:  Texas lawyer for 30 years in Estate law
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What is a safe harbor trust?

A Safe Harbor Trust, acts like a beneficiary in your Will. No Trust is established during the Grantor's lifetime; instead, the Grantor leaves instructions in the Will to create the Trust at the time of their death. The Grantor still appoints the Trustee and names the Beneficiary. But, unlike a Revocable Living Trust, the Trustee cannot be the surviving spouse and is irrevocable at the time it is established. Knowing that the surviving spouse likely has limited resources here on order to qualify for any long-term care benefits under Medicaid or other government programs, the Trustee manages Safe Harbor Trust assets for the exclusive benefit of the Beneficiary, but the assets in the Safe Harbor Trust are not owned by the Beneficiary. As such the assets are not counted as owned by the surviving spouse, they will not interfere with any long-term care benefits that he or she would be eligible for, and can be used to supplement where those benefits fall short. The use of a Safe Harbor Trust ensures that the Grantor's estate will not be subject to the $2,000 asset limitation of Medicaid, and provides much greater assurance that the surviving spouse will be able to maintain a much higher quality of life should long-term care become a reality. As additional advantages, the Safe Harbor Trust also maximizes the estate tax exemptions for married couples, and provides inheritance protection for the children of the Grantor upon the death of the surviving spouse, ensuring that any assets remaining in the Safe Harbor Trust go to or for the benefit of the Grantor's children or other named beneficiaries. They can be a great estate planning tool for someone on government benefits and again the trust gets created in the deceased person's will for the benefit of a surviving spouse or other relative that receives Medicaid of SSDI. I appreciate the chance to help you tonight. Please let me know if you have more follow-up questions. Thank you.
Reference here to help you understand Safe Harbor Trusts:

 

http://www.agingoptions.com/2013/01/the-difference-between-revocable-living-trusts-and-the-safe-harbor-trust/ 

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Question

What is a safe harbor trust? If I decide I am interested in having one for my elderly parents, can I begin to work with an attorney.
Submitted: 1 year ago.
Category: Estate Law
Expert:  RayAnswers replied 1 year ago.
A Safe Harbor Trust, acts like a beneficiary in your Will. No Trust is established during the Grantor's lifetime; instead, the Grantor leaves instructions in the Will to create the Trust at the time of their death. The Grantor still appoints the Trustee and names the Beneficiary. But, unlike a Revocable Living Trust, the Trustee cannot be the surviving spouse and is irrevocable at the time it is established. Knowing that the surviving spouse likely has limited resources here on order to qualify for any long-term care benefits under Medicaid or other government programs, the Trustee manages Safe Harbor Trust assets for the exclusive benefit of the Beneficiary, but the assets in the Safe Harbor Trust are not owned by the Beneficiary. As such the assets are not counted as owned by the surviving spouse, they will not interfere with any long-term care benefits that he or she would be eligible for, and can be used to supplement where those benefits fall short. The use of a Safe Harbor Trust ensures that the Grantor's estate will not be subject to the $2,000 asset limitation of Medicaid, and provides much greater assurance that the surviving spouse will be able to maintain a much higher quality of life should long-term care become a reality. As additional advantages, the Safe Harbor Trust also maximizes the estate tax exemptions for married couples, and provides inheritance protection for the children of the Grantor upon the death of the surviving spouse, ensuring that any assets remaining in the Safe Harbor Trust go to or for the benefit of the Grantor's children or other named beneficiaries. They can be a great estate planning tool for someone on government benefits and again the trust gets created in the deceased person's will for the benefit of a surviving spouse or other relative that receives Medicaid of SSDI. I appreciate the chance to help you tonight. Please let me know if you have more follow-up questions. Thank you.
Reference here to help you understand Safe Harbor Trusts:.. http://www.agingoptions.com/2013/01/the-difference-between-revocable-living-trusts-and-the-safe-harbor-trust/

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