Many consumers are executing revocable living trusts because they’re being sold on the notion that these documents can avoid a succession and probate. While they can, in fact, help someone do these things, that’s all revocable living trusts are good for. These benefits may not be as valuable as one might initially think.
Some revocable living trusts are expensive and may cost as much as a small uncontested non-problematic succession. So, the financial benefit that you get in the end may not be as great as you think.
What is important to remember is what revocable living trusts do not do: Because they are revocable, you can remove property from the trust. This means you are not afforded any kind of asset protection. If you owe money, your creditors will be able to seize whatever assets you placed into the trust.
Also, there’s no tax advantage to creating a revocable living trust. You will continue to pay your taxes the same way you always have paid them. Finally, placing property in a revocable living trust does not shelter it from government entities for you to pay for your long-term nursing home care.
Medicaid and the Veteran’s Administration will count all property placed into a Revocable Living Trust just like you own it. There is a five-year look-back period for Medicaid, and there may also soon be a look-back period with the Veteran’s Administration. You may be missing out on an opportunity to shelter your assets while you are healthy by placing your assets into a Revocable Living Trust.
To obtain additional information on legal and innovative estate planning strategies, you should always consult an experienced estate planning attorney.
Reach out to our legal representatives at Losavio & DeJean, LLC, The Louisiana Elder Law Firm for the support you need. Call (800) 835-5864 or contact us online for more information.