Tax Implications Of Asset Protection Strategies  

Conventional health insurance does not usually cover the costs of disability care or the fees of a nursing home, nor does Medicare. Should such a situation arise, the individual suffering from a long term illness and wanting to secure his or her assets might have to resort to a trust. In this case, the individual or individuals are known as grantors.

There are two broad types for this purpose. One is a Medicaid Trust, but this is fraught with perils. A Medicaid trust has to be created to put ones assets into and show that the individual is virtually penniless and has no means of support or paying for care. But a Medicaid Trust is irrevocable (IT), which means that the individual has revoked his or her rights over the assets placed in the trust. Medicaid also has a ‘five year look-back rule’ which allows the government to seize any assets the grantor placed in trust or gifted within 5 years of going on Medicaid.

One of the best methods of protecting assets in event of a long term care situation, is to resort to a Revocable Living Trust or RLT. In such a trust the individual or spouse (if there is one) acts as trustees who make decisions on the assets of the trust. Whatever is placed in trust is not assessable for long-term care costs. The beneficiaries, who may be the heirs, are nominated by the grantors of the trust. However, the beneficiaries have no rights to the assets of the trust till the death of the grantors, and the assets are safe from creditors.

A RLT may be so created that you have access to the income accruing from the investment assets of the trust. Or, in the case of a home, it could be placed in trust with the proviso that you live in it during your lifetime.

After death the assets pass to the nominated beneficiaries. If at any time circumstances alter, the trust can be revoked and the titles of the assets revert to the grantors.

More Articles :

WelcomeToWelcomeRocketswag

 

 

    
Tax Implications Of Asset Protection Strategies
 

Are-Living-Trusts-Legal-For-Asset-Protection      A living trust is a legal document that resembles a will. It includes instructions for what you want and how you would like to handle your assets after your death. But unlike a will, it does not involve probate at death, allowing your heirs to inherit the property immediately after your death. It also prevents the court from having any control over the assets, if in case the person becomes incapacitated. It allows the owner of the property to choose a trustee in case of incapacity. More..

 


 

 

 
   
Home  • Bankruptcy Law   • Business Law  • Constitution Law • CopyRight Law   • Criminal LawEmployment Law   • Family Law   • Immigration Law   • Legal Dispute      • Malpractice   • Personal Injury   • Real Estate Law   • Tax Law   • Traffic Law   • Trust Law Legal News

Tax Implications Of Asset Protection Strategies )
Copyright © 2012  Rocketswag.com, All Rights Reserved.