Advocating For Your Best Interests

How a trust can protect someone’s interests later in life

On Behalf of | May 14, 2024 | Uncategorized

Discussions about estate planning often center on other people. Instead of thinking about the testator drafting documents, the focus is often on how their choices may impact their family members. Much of estate planning does prioritize the legacy someone leaves when they die and the support that their loved ones may require after their death.

However, estate planning can also help protect people in unstable circumstances, such as those dealing with chronic health issues and those preparing for retirement. A trust can be beneficial for someone who wants to leave a particular legacy after they die. The creation of a trust can also protect a testator or trustor from certain challenges later in life.

How can creating and funding a trust benefit someone moving into their golden years?

Trusts protect personal resources

Living on a fixed income during retirement isn’t easy. The average person may struggle to balance their budget, especially if they face unusual expenses. Creditors ranging from credit card companies to hospitals could potentially sue someone as a means of recovering a debt owed by that individual. A trust created prior to financial hardship can protect key assets, including someone’s residence and their financial accounts, from creditor claims. Trusts are often a means of protecting assets that could otherwise be vulnerable to litigation or even divorce.

Trusts help people secure medical benefits

Many people create trusts specifically in case they require intensive medical support later in life. Medicare often does not provide adequate support for those who need in-home nursing assistance or a room in a nursing home. Medicaid can be difficult to obtain if someone has saved assertively for retirement and has valuable property in their name. The creation of a trust at least 60 months or five years before applying for Medicaid can increase someone’s chances of obtaining Medicaid approval without any large penalties. That trust can also protect someone’s family members from estate recovery efforts initiated by Medicaid after they die.

Trusts can help to ensure that someone maintains control over their assets and has the resources necessary to augment their standard of living later in life without leaving their assets vulnerable. Creating and funding a trust can be a smart estate planning move for those with sizable personal holdings and also middle-class professionals. Adults who understand the potential benefits of a trust can choose the right estate planning tools for their personal needs.