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Secure Your Assets with Trust Funding

Robin Burner Daleo • Feb 06, 2024

Question:

My parents created an irrevocable trust some years ago, I am the trustee. At the time that they signed the trust, they transferred their home into the trust. I’m not sure if their other assets were transferred into the trust at that time. How do I know if they are in the trust and if they are not, is it too late to protect them?

Answer:

Those are all terrific questions. As you know, Irrevocable Trusts can be used to protect assets in the event that either or both of your parents require long-term care in a Nursing Facility. Nursing Care on Long Island can cost anywhere from $10,000.00 to $14,000.00 for a regular bed. A special medical bed can cost up to $18,000.00 to $20,000.00 per month. Rightfully so, this is an important consideration for many of our clients. For starters, the best way to determine whether and asset has been transferred into the trust is to check the titling of the account. Once a transfer has been completed, the bank statements will name the trust or you as the trustee as owner as opposed to your parents individually. If you are unsure of the title, you can contact the financial institution where the assets are held to confirm that the trust is the owner. To answer your second question, it is not too late to seek to protect any assets which were either inadvertently or purposefully kept out of the trust at the initial funding stage. As you are likely aware, there is a five-year look back when applying for Chronic Medicaid. What this means is that assets transferred into a trust need to be there for five years in order to be considered unavailable for the purpose of qualifying for Medicaid. Should you decide to transfer additional assets into your trust at this time, that transfer will not disrupt the protection you likely already have on the home; it will simply begin a new “look-back” period for this new transfer. Assuming five more years pass, you will have protected these assets as well. In the event that five years does not pass and either of your parents need nursing home care, additional planning will have to be done to attempt to protect all or a portion of those assets. If you have created a trust, it is important that you check to ensure that all of the assets you wish to protect have been transferred into the trust. Periodic review of your Estate planning documents and financial statements with your attorney or financial professional can ensure that the plan you intended is in place and that your assets are protected should a time come when you need care.

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May is National Elder Law Month

by Robin Burner Daleo • 03 May, 2024

May is National Elder Law Month, for that reason we have decided to switch from our normal format and answer a question that we are oftentimes asked in our practice, “What is an Elder Law Attorney and why do I need one?” Answer: Elder Law is a fairly new and unknown area of the law. As baby boomers and their parents’ age, they are living longer and oftentimes, living with chronic medical conditions. As the cost of long term care continues to spiral out of control and families struggle to meet the needs of their aging members, an experienced Elder Law attorney can help you and your family members establish an estate plan that maximizes protection of assets while ensuring that your loved one has the best care available to them should they face a health crisis. While it is always best to plan proactively, Elder Law attorneys are adept at crisis planning and oftentimes can provide a solution which can preserve assets or save taxes where others you have consulted have told you that no solution existed. Elder Law attorneys must be familiar with multiple areas of the law - contract law, estate planning, trusts and estate administration, Medicare, Medicaid, health care insurance regulations, Public Health Law, Mental Hygiene Law, the Internal Revenue Code & State and local tax issues. In each instance the issues that we deal with are fact sensitive and the clients must be willing to give us the information that we need to formulate the Elder Law plan. This in itself is oftentimes a struggle as the clientele that we deal with tends to value privacy and are oftentimes reluctant to divulge information regarding their assets and private family issues. The various disciplines that make up the Elder Law practice are in a constant state of flux. As a result, it requires the Elder Law attorney to spend a great deal of time reading current journals and cases and continuously taking legal education courses. In addition, many Elder Law attorneys meet in informal study groups to read, understand and strategize. As the facts change, there will likely be different solutions for each client. What works for one client may be totally inappropriate for another. For instance, in one day, we may see two different clients, both clients are 86 years old, own their own homes, and need long-term care. Client A has a daughter, age 55 and Client B has a niece age 55. Client A, on the eve of going into a nursing facility, is advised to transfer her home to her caretaker daughter, who lives with her and has lived with her for more than 2 years. The transfer does not make Client A ineligible for Medicaid. Client B cannot follow the same plan because her niece is not her child. There are no exceptions for transfers to caregiver nieces. Because we do not have an exempt transfer available to us for Client B I advise Client B to sell the home and advise her that even though no pre-planning has been done, we will likely be able to save more than sixty percent of her aunt’s assets by engaging in crisis planning. Remember - one size fits all – is not the rule. Your Elder Law plan is personal, fact sensitive and requires a careful review of all of the facts and circumstances. By: Robin Burner Daleo, Esq.