Asset Protection Trust - Estate Law Questions
Do you need information about asset protection trusts? Or, what happens to assets which are not in an irrevocable asset protection trust? Asset protection trusts as the name suggests can be very important and useful to ensure one’s assets remain protected. Also, that they are used only when needed or at the time of retirement, as per the wishes of the beneficiary. These trusts are governed by various rules and provisions which one needs to understand correctly. This is possible when you take the assistance from estate law Experts online. Their expertise and inputs helps you with the decision making process.
Read below where Experts have answered a few questions about asset protection trusts.
While creating a revocable and irrevocable asset protection trust, what happens to assets not entered into the trust?
Case Details: The assets include a house which is paid for.
While it is not necessary to enter all the assets into the asset protection trust, it should be noted that those assets which aren’t present in the trust would get included in the ‘countable assets’ for qualification for Medicaid. Although it is not mandatory to include the house, if it is put into an irrevocable trust and removed again from the assets for Medicaid purposes, it is allowed as long as it was transferred at least five years prior to the Medicaid application.
From when is the five year period considered for Medicaid after an asset protection trust is established?
The five year period is considered from the time immediately preceding the Medicaid application. However, the law is not absolute in every agreement. The standard devices are where the irrevocable trusts retain no rights and are over five years old.
Is it possible to lose assets in an asset protection and irrevocable trust if one had to get admitted early into a nursing home?
Case Details: The person is unable to remain healthy for the 60 month period that the asset protection trust requires.
The assets in the irrevocable trust is protected as exempt resources under Medicaid. Medicaid would need one to spend their own assets to qualify for care. Any assets present in a revocable trust can be used. Lawyers who specialize in asset protection and Medicaid referred to as National Academy of Elder Lawyers (NAELA) need to be consulted in this case, to get particular recommendations.
In Nevada, does an asset protection trust need to be filed in court or is it a private record or transaction?
Typically, Nevada asset protection trusts are usually self-settled spendthrift trusts. This implies it can be held as a ‘private’ transaction. There is no mandate under the said chapter for the trust document to be filed either with the court or the county in order for it to be executed. However, if the trust’s name appears in certain deeds, assets, titles and records, a forensic accounting would be able to trace the assets back to the trust, if this would become an issue.
Can the IRS in the future, be able to confiscate a home which is placed in an irrevocable trust in the name of self and spouse?
Case Details: This is in case of a default of tax payment.
Normally, an irrevocable trust for the benefit of oneself alone does not provide asset protection. This type of a trust is referred to as a self-settled spendthrift trust. It is not possible for a person to enter his/her own assets into an irrevocable trust, benefit from those assets, while preventing creditors from accessing these assets. This is a violation of public policy and will not be permissible.
Why is the attorney suggesting all assets to be placed together to make the trust more efficient?
Case Details: The house is in a trust, liquid assets are in bank accounts and other assets have designated beneficiaries.
Though it is not mandatory to include all assets into the trust, it may be a good idea in this case, because despite named beneficiaries, until they decease, that property is your property and as such can be taken over by a creditor or can be forced into being used in the event of long term care and thereby not protected. Therefore, all of the assets need to go into the trust to obtain the protection that the trust offers. For long term care the asset named beneficiaries would have to be under one person’s care and in the event of being sued, these assets can be attached, taken and not doing so makes the trust only for the house. The attorneys are probably trying to maximize protection from creditors and Medicaid in the event it is needed, ensuring all assets are protected and one can dictate where they go in a trust similar to what a beneficiary’s responsibility is. The difference is that those assets are trust protected but not protected out of the trust.
The above information covers a few questions which people have had about asset protection trusts. There may be several other unanswered or specific questions you may have regarding these trusts where you need professional help. Therefore, to get customized answers to your questions, contact estate law Experts online. They help you make informed decisions based on your available options. You can be assured quality service and accurate information from the comfort of your home.