5 Useful Features to Include in Your Asset Protection Trust

Elder Law

Asset protection trusts are very useful legal tools for planning your retirement while saving your assets from a nursing home or Medicaid spend-down, undue influence, and even scam artists. Here’s some advice for making these trusts as effective and rewarding as possible, from an elder law attorney in New Jersey. 

  • How Do Asset Protection Trusts Work?

A trust is formed between three parties:

  1. The grantor (the person who is putting assets into the trust), 
  2. The beneficiary (the person who will receive income and other benefits from the trust), and 
  3. The trustee (the person who will manage the trust). 

In an asset protection trust, the grantor and the beneficiary can be the same person, so you can continue earning benefits from your trust. The trustee should be your elder law attorney; as they are licensed, bonded, and insured for this position. And, they are independent. The trust can be revocable or irrevocable, and both options have pros and cons. Your elder law attorney can help you decide what would deliver the best protection for your assets.

  • Features to Consider
  1. The Right to Receive Income: 

Often, trusts are used to provide regular income as well as to protect assets from taxation or Medicaid. This allows you to have access to dividends and investment income while still keeping those assets protected. This income can then be reported as individual income, which is taxed at a lower rate than trust income. It also helps reduce capital gains taxes.

  1. Lifetime Distributions: 

A trust can be tailored to allow the trustee to distribute assets to beneficiaries within the trustee’s lifetime. This is a useful option that allows the assets of the trust to be utilized in the event of unforeseen emergency expenses or to increase income during retirement.

  1. Checks and Balances: 

Checks and balances are there to ensure that the lifetime distributions clause isn’t abused, and is an important safeguard in the event of multiple beneficiaries. It simply requires that other beneficiaries must agree to assets being withdrawn from the trust.

  1. The Right to Change Beneficiaries: 

This feature allows clients to make changes to beneficiaries even when their trust is irrevocable. This is especially useful in the event of a divorce or marriage.

  1. Add Successor Trustees: 

If you use an elder law attorney to act as the trustee, this can be handled by their firm. But, it’s always a good idea to add your own trustees for your peace of mind. This is the person who will take over as trustee if the original trustee can no longer hold this position.

Speak to a Leading Elder Law Attorney in NJ Today for Advice on Your Trust
If you would like assistance in understanding and creating an asset protection trust, speak to Frank R. Campisano today. Experienced in elder law, compassionate and committed to his clients, you’ll receive the highest quality legal expertise and guidance that will help you secure better care. In addition, you can also prepare additional estate planning documents, such as your Last Will and Testament, Health Care Proxy, Power of Attorney documents, and trusts. For more compassionate legal guidance and a free consultation with an elder law attorney in New Jersey, please contact us or visit our website at https://www.scclegal.com/

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