Lifetime Independent Trust Guidance in PA

Nobody wants to think about their own mortality, but any experienced estate planning attorney can attest to the importance of putting your affairs in order ahead of time. Probate laws are complex, wills can be contested, and fraudulent creditors may file claims against your estate. One of the ways in which you can protect your asset and make sure that the intended beneficiaries will enjoy them in the future is by setting up an asset protection trust or a lifetime trust.

What is a lifetime trust and why find an attorney who specializes in asset protection trusts in PA? This arrangement places all your relevant assets into an irrevocable trust managed by a trustee. Once the asset protection trust or veterans’ asset protection trust is set up, the person who created it will continue to enjoy the use of the respective items. However, they will no longer have ownership over the respective assets and cannot dispose of them. 

How Does a Lifetime Trust Work?

The relevant parties to a lifetime trust and veterans’ asset protection trust, as your local estate litigation attorney will explain, are: 

• The settlor – the person who creates the trust 
• The trustee – the person who manages the trust according to the settlor’s wishes 
• The beneficiary – the person who will receive the assets held in trust after the settlor’s death. 

With the assistance of an experienced domestic asset protection trust lawyer, the trust will be created in due time to allow the settlor to enjoy Medicaid benefits. Also, it will contain specific instructions with regard to the distribution of benefits to the beneficiary at any moment for reasons such as: health, education, support, or maintenance. 

Benefits of Creating a Domestic Asset Protection Trust

One of the key words that define an asset protection trust is “irrevocable” (we will explain further benefits in the section on lifetime trust definition). This means that once the settlor has created it, the trust cannot be undone and its provisions canceled. It also means that the assets placed in the trust are intangible. 

Thus, the assets placed in a lifetime trust are protected from: 

• Divorce – the assets held in trust do not represent the joint property of the spouses 
• Creditors – by introducing a “spendthrift provision”, the beneficiary has limited control over the assets in trust and cannot be pursued by creditors
• Incapacitation – in case the settlor becomes incapacitated, the trustee will continue to act on their behalf and manage the trust. 

Last but not least, a domestic asset protection trust gives the settlor full control over the final distribution of their assets.  

What Is a Lifetime Trust and Why Should You Draft One?

So, what is a lifetime trust, exactly? This type of trust places all your assets in a trust managed by a trustee, offering your chosen legitimate heirs benefits, but not full control of those assets. The lifetime trust definition compared to a testament indicates several benefits:

• Your heirs cannot squander the assets by making reckless decisions
• The assets cannot be pursued by creditors, because technically they do not belong to the heirs or to yourself, for that matter
• The assets do not make the settlor ineligible for Medicaid or other forms of healthcare benefits for the elderly.

The cost of setting up a veterans’ asset protection trust or lifetime trust is affordable and is fully justified by the benefits you will reap. You will be able to enjoy your golden years knowing that your own care and medical needs are covered and that your heirs will safely enjoy the fruits of your efforts without squandering valuable assets. 

Reasons to Set Up a Veterans’ Asset Protection Trust

War veterans and their surviving spouses have the right to collect pension benefits from the Veterans Association (VA), which do not disqualify them from Medicaid. A veterans’ asset protection trust helps them maintain their eligibility for this program, even if the house they live in is sold.

If a veteran would sell his own house, the proceeds would disqualify them from Medicaid until most of the amount is spent. However, once the house and other assets are owned by a trustee under the lifetime trust definition, the trustee can sell the house and the proceeds are not counted as assets belonging to the veteran or their spouse. Thus, they continue to be eligible for Medicaid.

As local veterans’ asset protection trust attorneys who specialize in asset protection will tell you, Medicaid will evaluate your assets for the last 5 years prior to your application. This is why you should consider setting up this type of asset protection trust before you need to apply for Medicaid.

Experienced Legal Advice for Setting Up Your Asset Protection Trust

Miller Law, PC is founded by Steven D.W. Miller, a Certified Elder Law Attorney and experienced practitioner of family law and asset protection law. The practice is always ready to offer guidance for setting up an asset protection trust for clients in: 

Schedule a consultation with us: 855-936-3886!