Many people aren’t familiar with trusts; what they are, how they work and who they help. Consequently, they are reluctant to include trusts in their estate planning.
“The government does not count property held in trust, under some circumstances, when it is determining if you, or a loved-one, is eligible for benefits, like Medicaid.”
Before dismissing the idea of a trust, ask yourself the following questions:
- Do you want to leave something for your children and grandchildren, as opposed to spending down your retirement savings on nursing-home care, medicine and hospital stays?
- Do you have a special needs child and are you concerned about the costs of raising him/her?
- Do you worry about how your grown, disabled child will manage his/her finances after you pass away?
- Are you concerned about what will happen to your child, who spends too much and saves too little, after you’re gone?
If you answered “yes” to any of these questions, you should consider a trust.
Definition of a Trust
Simply put, a trust is a written document in which you give property (money, stocks, real estate, etc.) to an individual or institution which manages the property for you and/or someone you care about. You are called the “settlor” or “grantor”. The individual or institution which manages the property is called the “trustee”, and the people you care about are called the “beneficiaries”.
In the written document, called a “trust instrument”, you tell the trustee specifically how you want the trust property to be used for the beneficiaries. While the laws relating to trusts are complex, you, as the settlor or grantor, are typically permitted to be both the trustee and a beneficiary.
Benefits of a Trust
Trusts can be useful in the situations outlined above because the government does not count property held in trust, under some circumstances, when it is determining if you, or a loved-one, are eligible for benefits. So you can receive government benefits, like Medicaid, without spending down your savings or selling your property.
Also, trusts can be used to take care of a loved-one who can’t, or won’t, make responsible financial decisions for himself or herself.
NH Trust Attorney
At the T.W. Stevens Law Firm, we’ll take the time to listen to your concerns and help you decide if a trust is right for you. Call today!