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Law Educator, Esq.
Law Educator, Esq., Attorney
Category: Legal
Satisfied Customers: 118194
Experience:  JA Mentor -Attorney Labor/employment, corporate, sports law, admiralty/maritime and civil rights law
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I am 60. My only son is 10. I am considering buying my first

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I am 60. My only son is 10. I am considering buying my first real estate and a new car to live them to my son if I die. Under no circumstances do I want his custodial mother take a hand of it. Moreover she can trick him to give it to her. Also since he has been very well rated by gifted/talented program but very poor now, I expect him to potentially qualify for college scholarships for poor kids. No affirmative action though for him. However if I am still alive, and most likely I will be for a while I want to possess both house and a car. Now is my question: financial planning-wise and my son future college costs, would I be better off buying house and new car or not. If yes, what financial vehicle should I use? And how do I better arrange it to fit my goals? Who should be owners? We or both of us? I am talking about a house under $200K. Do I need to create a trust? Indiana.
Thank you for your question. I look forward to working with you to provide you the information you are seeking.

What you are seeking to do and wanting to protect the property from his mother and her manipulation as well, the irrevocable trust would be the most certain way to protect the property for your son and also protect it from medicaid if you should need long term care and also from all of you potential creditors and his potential creditors as well, since the property in the irrevocable trust is protected from creditors and not considered as his assets for scholarships and not considered as your assets either, it stands on its own separately.

You should be the trustee and name secondary trustee and make him the beneficiary. You can write the clauses in the trust as you want them to protect him.

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Customer: replied 4 years ago.

Thank you for your answer. If I go for irrevocable, would I loose interest tax deduction, homestead and other exceptions? I am not paying cash for house and car - I would expect to work as long as I can certainly 5 years until medicare but perhaps 8-12 years to pay for that house, with my around 85K-110K wages and 120K in IRA savings. Not sure I should contribute to 401 at this age and contested custody. Could you please clarify?

Thank you for your response.

If you place the home in trust, for IRS income tax purposes you remain owner and are able to continue to take the deduction in most all cases if you itemize. If you only plan on working 5 more years, usually contributing now to a 401 is not really worth it.
Law Educator, Esq. and 6 other Legal Specialists are ready to help you
Customer: replied 4 years ago.

I luck the confidence to choose to entrust the current legal system at my own will to make decision on irrevocable trust later when it matters the most. I'd rather seek some other financial vehicles, ones that could not possibly involve courts.

Thank you for your response.

While you may lack confidence in the legal system, the irrevocable trust has been around a long time and it is a very stable means of protecting your assets and accomplishing what you want to accomplish and they have been challenged in court and have survived. In fact, the law allows you to insert a "no contest" clause in the trust which provides that anyone who challenges your trust would never be able to benefit from the trust, which keeps people from suing over the irrevocable trust.

There really are no other financial vehicles that help people avoid the courts as well as the irrevocable trust does, because the irrevocable trust with a no contest clause rarely if ever ends up in any court.
Customer: replied 4 years ago.

But can I keep irrevocable trust almost empty but leave the trust as beneficiary in my life insurance and property ownership in my will? Would it be a better way to leave me a freedom of choice? I do not think I would need medicaid in the next 10-13 years. I will be only 68 when my son turns 18. Five years after that I should be fine. Besides I am not sure medicaid will still be available in 13 years down the road.

Thank you for your response.

You can keep it empty (that is your choice), but then at your death your will and estate has to go to court for probate to put assets into the trust, so you pretty much defeat your purpose and incur legal expenses needed for probate. You can leave your insurance beneficiary of the trust and that money goes to the trust without probate court.

Many people we get never thought they would need medicaid and they get hit suddenly by a catastrophic illness and then are too late to protect their assets for their heirs, so that is a choice that is up to you.
Customer: replied 4 years ago.

I am more concerned of rumors of coming laws or presidential orders making it as countable for medicare and even regular SSN, as well as being countable assets to deny my son's future college scholarship applications. Besides I do not see good clear investment choices and sitting in cash it does not make sense. I'd rather move it to something that protect it from college scholorships, medicare, ssn deaming it countable assets 8 years down the road.

I'd rather buy a house and new luxury car since I expect an inflation to kick sooner or later.. Hiding it in irrevocable trust locks it forever for unforseen future that I have no clue about, and cannot utilize and save my costs as house and a car would let me. But how to draw from IRA with my about 100K salary, I wonder?

Thank you for your response.

If we lived our lives in fear of what the president might try to do in the future, none of us would leave our houses other than to pack up and leave the country. You would rather "move it to something that protects it" but the irrevocable trust is what protects it and there are no other vehicles that offer that type of protection.

You asked a question about a trust, you are free to do what you want with that information, but this president will be long gone in 3 years and because Congress all uses these trusts do you really think they are going to enact a law to hurt themselves? I believe your fears are unwarranted I am sorry to say.
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