When estate planning, you may want to consider how trusts can serve your needs. Trusts are repositories for assets that benefit others outside of a will, which is commonly used to convey assets to beneficiaries. Some trusts have tax advantages, and some allow you to apply for Medi-Cal, California’s Medicaid, which pays for long-term care when you qualify financially. Some trusts benefit special-needs relatives.

Trust assets are distributed quickly after the grantor’s death because the assets are not subject to probate. Depending on your situation, a specific trust could be an essential component of your financial plan. An experienced trusts attorney could sit down with you and discuss the different types of trusts in Tustin.

Revocable Living Trusts

Revocable trusts are controlled by the people depositing assets over their lifetimes. Assets can be added or removed, and beneficiaries can be changed. The revocable trust becomes irrevocable at the grantor’s death, and there may be an advantage for those who may want to qualify for Medi-Cal long-term care.

Grantors can separate the assets that disqualify them for Medi-Cal from assets that will go through probate. Medi-Cal cannot try to take assets in a revocable living trust as repayment. Without a revocable trust, all a grantor’s assets can be taken by the state as a result of probate. A lawyer with experience in the various types of trusts in Tustin could prevent this from happening.

Irrevocable Trusts

Irrevocable trusts are advantageous for tax purposes. Grantors give up ownership of assets deposited in them and cannot manage, sell, or add to them because they are in the hands of a trustee.

Special-Needs Trusts

A special-needs trust allows a parent or relative to provide for a person who may not be able to care for themselves due to special physical or cognitive needs. Most special-needs residents rely on Supplemental Security Income (SSI) and Medi-Cal to supplement Social Security Disability Insurance (SSDI). Parents or relatives can set up trusts to make their special-needs children’s lives more comfortable and not worry they will lose their government benefits because their income is too high if they inherit.

Third-Party Special-Needs Trusts

Medi-Cal is authorized to seek and seize assets from those who receive Medi-Cal benefits but end up with inheritances. A third-party special needs trust allows the grantor to deposit assets, name a trustee for the benefit of the special needs person, and control what happens to the remainder when the grantor dies instead of allowing the state to take it. An attorney in Tustin could give advice about the best types of trusts for a family and their situation.

First-Party Special Needs Trusts

Disabled people fund first-party special needs trusts with their own assets from personal injury lawsuits or proceeds from inheritances. These trusts are irrevocable and do not interfere with government benefits. When the special-needs beneficiary dies, however, Medi-Cal can seize remaining assets. However, to qualify for a first-party special needs trust, you must be under 65 years of age. If you are a minor, then a parent, grandparent, or court-appointed guardian must set it up. Funding must be solely from the beneficiary’s assets.

Pooled Trusts

Non-profit organizations are trustees for pooled trusts, which assist several special-needs beneficiaries without disrupting their government benefits. Each person’s account is pooled with other accounts for investment purposes, although each can access their account and track benefits.

Learn Which Types of Trusts in Tustin Will Benefit You

Estate planning does not have to be a conundrum. It is, however, a necessity if you have assets and loved ones or need to consider relatives with special needs or your own future in a long-term care nursing facility. We can untangle the process and provide a plan unique to your needs.

There is no better time than now to address your estate planning needs. You want to leave your hard-earned wealth to your family, and waiting can be disastrous if something happens to you before you get around to it. Call a lawyer at Amity Law Group to learn what types of trusts in Tustin are right for you.

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3733 Rosemead Blvd., Ste. 201
Rosemead, CA 91770

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1930 S. Brea Canyon Rd. #120
Diamond Bar,  CA 91765

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(626) 307-2800
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Orange County Office

511 E 1st St., Suite H
Tustin,  CA 92780

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(626) 307-2800
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Amity Law Group, LLP

Amity Law Group, LLP