ASSET PROTECTION ATTORNEY LOS ANGELES
Asset protection consists of legal techniques based upon statutory and case law dealing with the protection of one’s assets from individuals, as well as civil lawsuits. Such protections come in many forms and a Los Angeles asset protection attorney can help. Here are some examples:
TYPES OF ASSET PROTECTION TRUSTS
Irrevocable Asset Protection Trusts
One type of trust that will protect your assets from your creditors is called an irrevocable trust. Once the trust creator establishes an irrevocable trust, he or she no longer legally owns the assets he or she used to fund it, and can no longer control how those assets are distributed. This means that the person or persons establishing the trust may not be the trustees or the beneficiaries of the trust. By creating an irrevocable trust, the trust maker surrenders the ability to later modify the trust instrument.
Due to this change in ownership, a future creditor cannot satisfy a judgment against the assets held in irrevocable trust. Its critically important to understand that the extent of protection turns largely on state law issues.
Importantly, a court can undo an individual transfer to a trust if it finds that the transfer was made with the intention of defrauding creditors. These transfers are considered fraudulent, and in many cases carry significant legal penalties. This is why it is important to practice asset protection planning well before you even anticipate being the subject of any liability. Moreover, it is imperative that you work closely with experienced and credible Los Angeles estate planning legal counsel before engaging in any measure of asset protection.
Irrevocable Medi-cal Asset Protection Trusts
Medi-Cal Asset Protection Trusts are utilized to protect assets owned by a couple or single individual, from the high costs of long-term care. Used properly, these trusts can help protect your principal residence, along with other assets like cash, securities, etc.
Key benefits of gifting in your assets into the Irrevocable Medi-Cal Asset Protection Trust are:
- Asset protection from future creditors of beneficiaries
- Preservation of the Section 121 exclusion of capital gain upon sale of the settlors principal residence (the settlor is the trustmaker)
- Preservation of step-up of basis upon death of the settlors
- Ability to select whether the settlors or the beneficiaries of the trust will be taxable as to trust income
- Ability to design who will receive the net distributable income generated in the trust
- Ability to make assets in the trust non-countable in regard to the beneficiaries eligibility for means-based governmental benefits, such as Medicaid and Supplemental Security Income (SSI)
- Ability to specify certain terms and incentives for beneficiaries use of trust assets
- Ability to decide (through the settlors other estate planning documents) which beneficiaries will receive what share, if any, of remaining trust assets after the settlors die
- Ability to determine who will receive any trust assets after the deaths of the initial beneficiaries
- Possible avoidance of need to file a federal gift tax return due to asset transfer to the trust
Irrevocable Beneficiary Inheritance Trusts
Beneficiary Inheritance Trusts are trusts which can be incorporated into your overall revocable or irrevocable trust-based estate plan. These trusts, which spring into place upon your passing, are available to your beneficiaries for asset protection purposes. Simply put, instead of taking their inheritance outright, as is most often the case, your beneficiaries would have the option to leave their share of your estate in your irrevocable trust. Doing so, could help protect their inheritance from divorcing spouses, or even creditors. This helps assure that your legacy benefits those who you choose as your beneficiaries, and is not wasted on greedy spouses or other non-beneficiary litigants.
Revocable and Irrevocable Special Needs Trusts
A Special Needs Trust (SNT) is a trust that is established for an individual with special needs who is or may become dependent on public benefits. The trust is specifically identified to meet certain supplemental needs and to enhance the quality of life for the beneficiary, the special needs person. Most importantly, the Special Needs Trust is created so as to not disqualify the beneficiary for the public benefits being received. The trust, then, is a pool of money available for the benefit of the beneficiary in order to provide him or her with goods or services that public benefits do not provide. For example, SNT funds may be used for in-home care services that would otherwise not be affordable to the beneficiary. Should a person with special needs receive these funds outright and outside a properly created SNT, the individual may become ineligible for the public benefits and reinstatement of the benefits can be a difficult process.
A Special Needs Planning Attorney in Los Angeles is an essential advocate when preparing SNTs for individuals with special needs. The attorney will be able to identify the type of SNT that would be helpful in the particular situation and will know how to properly construct it so as to prevent the person with special needs from being kicked off his or her benefits. There are many roadblocks that can arise in the planning process and it is imperative that you have an attorney familiar with the many federal and state laws and regulations concerning public benefits and SNTs.
If you have a client with special needs who would benefit from the establishment of a Special Needs Trust, please contact our law firm. Our Asset Protection Attorney in Los Angeles, CA is committed to and passionate about assisting those with special needs and look forward to helping in any way we can.