Trusts

Trusts are a legal tool often used to pass wealth to a spouse or to the next generation, usually with rules attached. A trust is a formal legal relationship where a property owner (the Settlor or Grantor) conveys legal title to a third party (the Trustee) who then holds or uses trust property for the benefit of a person (the Beneficiary). Most trusts are written, but a trust can be established orally or can arise by operation of law.

Not everyone needs a trust, but they can be game changers when used for the right reasons. Here are a few reasons to consider using a trust: (1) controlling how your property is used by beneficiaries; (2) privacy and avoiding probate; (3) tax planning or public benefits planning; (4) disability and special needs planning; and (5) creditor protection. Trusts can also be used to avoid ancillary probate estates if you own real property in another State.

If you decide to use a trust, be certain you understand what your trust is supposed to accomplish. Knowing the purpose of the trust will help you communicate your goals with others and will give your lawyer the ability to determine whether you really need a trust, or whether some other, less complicated, legal tool would be a better fit. If the right tool for the job is a trust, then decisions need to be made regarding whether to establish it during your lifetime (a Living or inter vivos trust), or at death (a testamentary trust). Should the trust be revocable or irrevocable? Should all of your property be placed in the trust, or should you funds it with a portion of your estate? Who will serve as trustee? What rules should be included in your trust agreement regarding how trust property is used? If someone tries to sell you a trust without helping you answer these questions, then you’ve found a hammer salesman – someone who thinks every problem looks like a nail.

Introduction to Trusts for Elders and Special Needs Beneficiaries
Introduction to Trusts
Why Protect Assets?
What is Supplemental Security Income?
What is Medicaid?
Why use a Special Needs Trust?
What can a Special Needs Trust pay for?

Trust Formation and Structure
Creating the Trust
Trust Instrument and Essential Terms
The Trustee
Beneficiaries (of Trusts)
Purpose (of the Trust)
Revocation, Modification, Termination
Spendthrift Provisions
Discretion and Distribution Standards
Construction (Construing the Trust)

Funding the Trust
Funding, Generally
Sources of Funding

Trust Administration
Administration, generally
Administration and Investments
Investment Decision-making process
Income and Principal
Compensation
Accountings
Bond
Declaratory Judgment
Distributions, generally
Trust Ownership of a home
Distributions to family members

Medicaid Trust Rules
Trust Rules, generally
Self-Settled Trusts, generally
Third Party Trusts, generally
Income Only Trusts
Special Needs Trusts
Pooled Trusts
Sole Benefit Trusts
Funding Issues Associated with Special Needs Trusts
Distributions from Special Needs Trusts
SNT Accounting

Eligibility for Veteran’s Aid and Attendance
VA Aid and Attendance, generally
Treatment of Trusts
Revocable Trusts
Irrevocable Trusts

Tax Issues

Resources:

BLOG POSTS

Executor Is Subject to Probate Court’s Authority While Serving

In In re Estate of Cornett, 357 Ga. App. 310 (2020), Sarah Cornett was appointed successor Executor over the Will of her deceased husband, George Thomas Cornett, Jr. (“Tom”). Tom had five surviving adult children. Sarah appealed after she was removed as Executor and ordered to return certain estate assets and to pay certain funds […]

Form: Special Needs Planning Guide

The key to successful special needs planning is preparing for the day when parents, grandparents, spouses or others are no longer available to assist the individual with special needs. There are many special needs planning guides out there, but the form below is an example you can use. We also recommend Hal Wright’s book, the […]

Medicaid: Pooled Trust Subaccount Established for Individual Over 65

Pooled Trust Subaccount Established for Individual Over 65yo. An 83 year old deposited $12,320 into a pooled trust in August 2008. In November 2008, he applied for Medicaid. His application was denied. The parties stipulated the trust complied with 42 USC 1396p(d)(4)(C), but the Department took the position a transfer penalty should be applied. The […]

Medicaid: Corpus of Irrevocable Trust Countable

Corpus of Irrevocable Trust was Countable Resource. Two trusts Petitioner created in 2000 held a cumulative balance of approximately $64,000. Petitioner was settlor and a co-trustee of each trust. On April 21, 2008, Petitioner filed an application for nursing home Medicaid. DFCS determined that the trusts were available resources causing Petition to be ineligible for […]

Medicaid: DFCS directed to determine eligibility where application pending over one year

DFCS directed to determine eligibility where application was pending for over one year. Petitioner filed an application for Medicaid on May 22, 2007. On June 18, 2007, a verification package was given to Petitioner’s daughter. On July 1, 2007, the application was denied for failure to provide verification. On July 25, 2007, Petitioner requested a […]

Medicaid: Sole Benefit Trust rejected and transfer penalty imposed

Sole Benefit Trust rejected and transfer penalty imposed. An 86 year old applicant established an irrevocable trust for the benefit of his 64 year old daughter. However, the trust was not submitted to DCH Legal for approval and Petitioner submitted no evidence that the trust comported with Section 2346  relating to special needs trusts. Further, the […]

Arc Posts Videos Overviewing Special Needs Trusts and ABLE Accounts

The Arc of the United States recently posted new videos providing an Overview of Special Needs Trusts and ABLE accounts. English versions of these videos are available on YouTube and are linked below for your convenience. Spanish versions are available at the YouTube link below. Find other Arc Videos here

2021 National Conference on Special Needs Planning and Special Needs Trusts, October 13-15, 2021

Registration is open for the 2021 National Conference on Special Needs Planning and Special Needs Trusts, October 13-15, 2021. It will be held at Vinoy Renaissance Resort & Golf Club in St. Petersburg, Florida and virtually online. Always popular, a representative from CMS will join to discuss recent events. This year, Gene Coffey will describe […]

2022 Special Needs Planning Symposium, February 24 – 26, 2022

We don’t always give a shout out for symposiums sponsored by others, but we’ll make an exception here. The 2022 Special Needs Planning Symposium looks like an all-star cast for anyone on the west coast who works with special needs individuals (especially if you can’t make it to Stetson). Two sessions look especially interesting: (1) […]

Estate Tax and Gift Tax Anti-Claw Back Regulations

In 2021, the life-time estate and gift tax exemption is $11.7 million per donee (dead person or giftor). The exemption is scheduled to roll back to pre-2018 levels in 2026 unless extended by Congress. IRS Notice IR-2019-189 accompanied final regulations known as Anti-Claw Back regulations. These regulations essentially state that if you make a gift […]

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