Do You Have the Right Revocable Living Trust Plan?
In the world of living trusts, one size truly does not fit all. An estate plan for a young family should be completely different than an estate plan for those in the prime of their life, which incidentally, is totally different than an estate and elder law plan for seniors. For example, young families should seriously think about having a Guardian Angel Trust™ set up for their children if the unthinkable occurs and both parents predecease their kids at a young age.
What is a Guardian Angel Trust™?
With a Guardian Angel Trust™ (GATs), parents can designate guardians, trustees, and protectors for their kids. Having a “panel of advisors” makes sure that until your youngest child reaches a certain age, all trust assets are held for the common benefit of all children. That means that one of your kids may get “more,” but that's probably what you would've wanted (for instance, you'd likely pay a lot for one child to receive costly medical treatments, if they needed it) in certain circumstances.
Also, with a GAT, your kids can still access trust assets for their wellbeing, as well as have the ability to receive an “advance” on their inheritance for certain reasons, such as a down payment on a home or help paying for a wedding.
What Happens Next?
Finally, once your youngest child reaches the target age, the trust is split equally among all children. From there, parents designate yet another age — when the children are more mature — to receive the funds outright. Before the second designated age, however, the trust morphs into an asset protection trust so divorcing spouses, ex-business partners, a bankruptcy court, and all other potential creditors or predators, cannot reach the assets in your GAT.
For people in the prime of their lives and their older children, excellent estate plans tend to focus less on kids' protection planning and more on probate avoidance, asset protection, and distributing your estate in a manner that reduces the potential for conflict among family members. Drafting such a plan requires an attorney to conduct an in-depth analysis of personal family dynamics so they can tailor a very specific trust that addresses family concerns with laser precision.
Estate Planning for Elderly People
When it comes to seniors, experienced elder law attorneys understand that estate plans are (or should be) totally different. Recently many trust and tax laws have changed, which makes most estate plans of individuals over the age of 65 completely out of date.
For instance, if you executed an estate plan before 2013, chances are, your estate plan needs a complete overhaul for tax, Social Security, Medicare, Medicaid, and VA pension benefit reasons. How could that be? For starters, death tax laws are much more liberal than in the past. Today, many couples have an AB-type living trust plan (a living trust that divides into sub-trusts after the death of the first spouse), which needlessly causes extra administration as well as legal and accounting fees when one spouse passes away.
What About Simple Trusts?
Even if couples (or a single individual) have a “simple” trust, that trust is most likely focused on the issues surrounding what happens when the settlor (the person who set up the trust) dies or becomes incapacitated, which incidentally, is probably a good start for persons under the age of 65. While the question of what happens when we die is a crucial one to ask, the more important question seniors should be asking themselves is what happens if I live? In other words, how am I (and my loved ones) going to deal with the emotional, physical, and financial burdens of my aging and long-term care needs?
What Does a Senior-Focused Estate Plan Look Like?
These are the issues that elder law attorneys face every day. So, what does a senior-focused estate plan look like? For starters, financial powers of attorney allow agents to maneuver an estate so a person can qualify for government benefits such as Medi-Cal and/or VA aid and attendance pension benefits, where appropriate. Estate and elder law attorneys also focus on asset preservation trusts that not only avoid probate and say who gets what after you are gone, but also help seniors continue to live in the environment and conditions that they want in their retirement years while preserving assets for their loved ones.
What is a Litigation Avoidance Estate Plan™?
Since part of our practice includes Trust Litigation, oftentimes we can anticipate problems before it occurs. That's because we've seen every type of attack in the past. These attacks are especially pronounced in blended family situations or where there are children from a prior relationship. In such cases, we employ our unique litigation avoidance strategies in order to render predictable attacks impotent. No other law firm engages in the precautions we've developed and because of such, bad actors have never been successful in overturning our estate plans. The same cannot be said about estate plans that our firm did not create but in which we help our clients litigate. The stress and cost trust litigation causes is incalculable. That's why we cannot emphasize enough the importance of employing a litigation avoidance estate plan if you can see problems on the horizon.
Contact Our Estate Planning Expert Today
Here at Kaiden Elder Law Group, PC, we specialize in restructuring outdated estate plans. To make sure that your estate plan does what you need and want it to do, please do not hesitate to contact us for a consultation.