Frequently, families want to protect their life’s work for their descendants. Among the options are asset protection trusts. However, to truly provide asset protections, the trust must be irrevocable. Irrevocable means the parent must give up control of the assets that they are wanting to protect. This is where the struggle begins.
Asset Protection: Why?
Seniors are often targets of scammers and predators… we have all heard the horror stories. Even as seniors become victim to dementia and Alzheimer’s, they can sometimes be their own worst predator. They may unknowingly give away or squander their life savings. As seniors’ ability to drive diminishes, their car accidents open them up to lawsuits. This is all in addition to the extremely high cost of long term care, which can eat up a bank account quickly. For these reasons, an asset protection trust can provide protection so that seniors can preserve their legacy.
Asset Protection: How?
An irrevocable asset protection trust means that the trust cannot be changed by the trust-maker. That trust-maker chooses someone whom they trust to be the trustee of those assets. That trustee must abide by the instructions in the trust that the trust-maker put into place. In this way, the trust-maker does not have control of those assets, so neither do the predators. That is how the protection is established.
However, the trust can be drafted in such a way so that if the trust-maker needs those assets, the trustee could have the ability to make certain gifts. This is where an elder law attorney is so important when drafting the trust.
Control: Why?
Frequently, families want to protect their life’s work for their descendants. Among the options are asset protection trusts. However, to truly provide asset protections, the trust must be irrevocable. Irrevocable means the parent must give up control of the assets that they are wanting to protect. This is where the struggle begins.
Asset Protection: Why?
Seniors are often targets of scammers and predators… we have all heard the horror stories. Even as seniors become victim to dementia and Alzheimer’s, they can sometimes be their own worst predator. They may unknowingly give away or squander their life savings. As seniors’ ability to drive diminishes, their car accidents open them up to lawsuits. This is all in addition to the extremely high cost of long term care, which can eat up a bank account quickly. For these reasons, an asset protection trust can provide protection so that seniors can preserve their legacy.
Asset Protection: How?
An irrevocable asset protection trust means that the trust cannot be changed by the trust-maker. That trust-maker chooses someone whom they trust to be the trustee of those assets. That trustee must abide by the instructions in the trust that the trust-maker put into place. In this way, the trust-maker does not have control of those assets, so neither do the predators. That is how the protection is established.
However, the trust can be drafted in such a way so that if the trust-maker needs those assets, the trustee could have the ability to make certain gifts. This is where an elder law attorney is so important when drafting the trust.
Control: Why?
Seniors often do not want to give up control. That is a valid concern. The senior may still be relatively young and in good health, looking at 20-30 active years. They want to have control of the funds to enjoy the things they have dreamed of. That is an absolute valid point. There are still ways to provide protection of assets for a spouse and children if the senior should pass away during that time.
Control: How?
A revocable living trust allows the trust-maker to be his/her own trustee and control the assets. This means that the senior retains complete control. Yet, the trust can be drafted in such a way that if the senior passes away suddenly, the spouse can receive the marital share, protected in an irrevocable trust. This can provide protection for the spouse; a non-marital share can be protected for any descendants. Just know, this does not protect any assets if the first spouse were to be victim of a predator or need long term care.
We Can Help
The good news is that you have options, and more options are available to you the earlier that you start your planning. Please let us help you to evaluate your individual needs and develop a plan that will give you peace of mind for whatever comes your way.
For more information, contact our Lebanon, TN office at 615-444-3568 and schedule your appointment today.