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Trusts for Minor Children in New York
Estate Planning

Trusts for Minor Children

Trusts for Minor Children in New York Understanding the Importance of Trusts for Minor Children Establishing a trust for minor children is a vital component

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Reasons to Hire a Probate Lawyer in New York Probate is the legal process of validating a will and administering an estate after someone’s death.

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Understanding Wills and Trusts in New York
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What is Elder Law in New York 2024?
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When you transfer assets outright to a beneficiary, you won’t really be protecting those assets, as you would obviously think. Let’s say you bequeath your house to your child. Should that child marry and get divorced, they may lose half the value of that property. Their creditors can come knocking, and the property would be gone in the twinkle of an eye.  But when you keep and transfer same assets in a MAPT, you are sure no creditors, bitter spouses, lawsuit, or Medicaid can lay claim to them.

Tax benefits.

Having a Medicaid Asset Protection Trust is also better than an outright transfer when it comes to tax.

Some people will consider transferring a home to a child while reserving a life estate for itself. Should your child sell the property, you would lose money on the capital gains exclusion.

On the other hand, property kept in a MAPT will usually have a higher value when you die because housing cost is ever on the increase.  So should your child sell after your death, the price will be based on the value at your death, not at the time the MAPT was created.

Financial Benefit.

Although the assets in a Medicaid Asset Protection Trust are no longer yours, you still receive some benefits. You would not be allowed to sell any investments but will still receive your income normally.  The trust assets are no longer in your ownership but you are still relatively in your control because you are the one who writes out the trust’s terms and selects a trustee who will manage the assets.

Medicaid Trust in details

A Medicaid trust is a type of irrevocable trust created by an individual during his or her lifetime. This type of trust is used to hold the title to an individual’s home, including other properties or assets.  This type of trust can also persevere your right to reside in your home, including the right to select a trustee as you deem fit. Since this type of trust offer management and legal protection of the assets you put in them, they provide an ideal option for individuals who are worried about safeguarding their estates from the influence of nursing home care cost.

However, these are essential factors that you need to consider if it is the appropriate choice for you. Because Medicaid trust are irrevocable, it is impossible to alter it. This is not often an issue since all that is written in the trust are for your benefit and not that of a beneficiary as it is with other types of irrevocable trust. You also have the authority to utilize all the income gathered by the trust’s assets. In addition, by halting your access to the principal in the trust, you automatically lose ownership of those assets when determining your Medicaid qualification.

Bottom line

There is a look back period of 5 years when you apply for Medicaid. They will look at your financial history during the last 5 years. If you are discovered to have made transfers (gifts) during that time window, you will be disqualified from Medicaid benefits for some time.  Notably, retitling assets into a trust is regarded as gifting the trust. That is why you have to execute and fund your Medicaid asset protection trust at least 5 years before applying for Medicaid in Queens.

Take advantage of Medicaid Trust today

A Medicaid trust come with several benefit. Aside from helping you secure your assets, this irrevocable trust can be created to allow you to alter beneficiaries and channel the distribution of trust properties to your beneficiaries after your demise.  Also, this trust can allow you to share the properties in your trust even while alive. Since the divestment happened when the property was sent into the Medicaid trust, distributions that occurred at the look back period can be made to your beneficiaries without attracting sanctions.

Get help from an elder law attorney near you Queens

To ensure you have a solid plan in place towards your long term care, speak with a New York elder law attorney and estate lawyer near you. Call us to speak with one.

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