Your retirement years should be enjoyable, so making your plans now (even if you’re already retired) can help give you peace of mind later on. Preparing the arrangements should be a straightforward process, so you can quickly return to your daily life making memories with your loved ones.
There are many elder law components to consider as you make your plans, from asset protection options to veteran benefits. This article aims to help you better understand elder law and Irrevocable Trusts in Pennsylvania. You’ll learn how an Irrevocable Trust works, why you might need one, and the different Trust options you could select.
Learn More About Elder Law
Elder law focuses on long-term planning that involves making decisions for the future regarding your finances, healthcare treatments, and beneficiaries. Working with an elder law attorney can help you navigate your state’s laws to ensure your wishes are met. They’re also familiar with the various options available, so you can make a well-informed decision knowing all the facts.
Irrevocable Trusts in Pennsylvania
When you create an Irrevocable Trust, you agree to release control of all listed assets, including homes, bank accounts, possessions, and investments. The person of your choosing (known as the Trust Protector) is now the owner of those assets, which means you’ve given up your rights to change or terminate the Trust.
Facts About Irrevocable Trusts
- The purpose is to protect your assets.
- You retain the right to receive dividends and interest on any financial assets.
- Once the Trust is complete, changes can’t be made to it.
- You can select more than one Trust Protector.
To prevent potential problems, consult a lawyer about your specific circumstance before creating an Irrevocable Trust.
3 Reasons to Consider an Irrevocable Trust
Remember peace of mind? If you’re unsure about releasing the rights of your assets, here are some situations where an Irrevocable Trust might be the best option for securing peace of mind.
Applying for Government Assistance
This applies to any program that considers your assets as part of your income. The largest program that impacts seniors is applying for Medicaid.
Pay Less Money in Estate Taxes
After you pass, if you have fewer assets, your family will pay less money in estate taxes.
Saving Your Assets from Unforeseen Circumstances
This especially pertains to lawsuits, creditors, and long-term medical care costs.
Different Irrevocable Trust Options Available
You just spent hours working on your future plans and making (what you believe) the best decisions. You think everything’s complete, only to learn there was another option you didn’t know about. This is one of the main reasons many men and women choose to work with an elder law attorney, so they can understand what options are available to them. This is especially true for Irrevocable Trusts since each serves a specific purpose.
We recommend you consult with an elder law attorney before selecting a Trust.
Beneficiary Controlled Trust (BCT)
Purpose: Protection from divorce, creditors, and lawsuits.
Generation-Skipping Transfer Tax Exempt Trust (GST)
Purpose: Assist with multi-generational estate tax-free transfers.
Grantor Retained Annuity Trust (GRAT)
Purpose: Move assets out of a taxable estate and pay less in estate taxes.
Irrevocable Life Insurance Trust (ILIT)
Purpose: Remove life insurance proceeds from a taxable estate.
Medicaid Asset Protection Trust (MAPT)
Purpose: Protect assets from the costs of long-term nursing home expenses.
Qualified Person Residence Trust (QPRT)
Purpose: Remove specific property from a taxable estate.
Contact Rebecca About Your Elder Law and Irrevocable Trust Questions
Rebecca has a reputation for providing knowledgeable and trustworthy information to her clients so they can make well-informed choices about their future. Connect with her to learn how she can help you with your long-term planning decisions.