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When Should Elders Use Asset Protection Trusts?

 Posted on February 19, 2024 in Estate Planning

Blog ImageAs people age, they face a unique set of challenges and concerns, particularly when it comes to protecting their assets. With the rising costs of healthcare and the potential need for long-term care in the future, elders must carefully consider how best to safeguard their hard-earned wealth. One option that can provide peace of mind is an asset protection trust.

An asset protection trust is a legal tool that allows a person to transfer ownership of their assets into the control of a trustee while providing instructions for how the assets should be used to provide for a person’s needs or distributed to other beneficiaries. The primary purpose of this type of trust is to protect assets from potential creditors or legal claims, ensuring that they will be preserved for the benefit and use of the person and their loved ones. An attorney with experience in estate planning and elder law can provide guidance on the types of trusts that may be used while ensuring that the proper steps are taken to protect a person’s assets.

The Benefits of Asset Protection Trusts

Asset protection trusts offer several advantages for elders who want to secure their financial well-being, including:

  • Creditor protection: By transferring assets into an irrevocable trust, elders can shield them from potential creditors. This could ensure that assets will not be lost to issues such as lawsuits arising from accidents or medical bills not covered by insurance.

  • Medicaid planning: For seniors who anticipate needing long-term care in the future, an asset protection trust can help them qualify for Medicaid benefits while preserving some level of control over their assets.

  • Inheritance planning: Elders may have specific wishes regarding how they want their assets to be distributed to their family members or other beneficiaries after they pass away. An asset protection trust allows them to establish clear guidelines for inheritances and ensure that their intentions are carried out correctly.

  • Tax benefits: There may be certain tax advantages associated with using an asset protection trust, such as reducing estate taxes or capital gains taxes.

When to Consider an Asset Protection Trust

While asset protection trusts can be beneficial for many elders, there are specific situations where they may be particularly useful:

1. Concerns About Long-Term Care Costs

The rising cost of long-term care is a significant concern for many seniors. For elders who may need nursing home care or assisted living in the future, an asset protection trust can help protect their assets from being depleted to cover these expenses, and they may still be able to qualify for Medicaid benefits.

2. Business Owners and Professionals

For a person who owns a business or works in a profession that exposes them to potential liability, such as a doctor or architect, an asset protection trust can safeguard their personal assets from any lawsuits or claims against their professional practice.

3. Impending Lawsuits or Legal Claims

For those who are facing pending litigation or believe that legal action may arise in the future, it is wise to explore the options available for protecting their assets through strategies like an asset protection trust.

4. Estate Planning and Wealth Preservation

If preserving wealth and ensuring that it passes on according to your wishes is a priority, incorporating an asset protection trust into an estate plan can provide added security and control over how assets will be distributed among beneficiaries.

Contact Our San Antonio Asset Protection Attorneys

At The Law Office of Ryan C. Moe, PLLC, we leverage our experience in elder law, estate planning, and asset protection to guide families through the process of establishing comprehensive estate plans. We can help you determine whether an asset protection trust will be beneficial for you and your family, and we will make sure the proper procedures are followed to safeguard your assets and protect your financial interests. Contact our Bexar County estate planning lawyers today at 210-861-6000 to set up a consultation and learn more about how we can help you.

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