What is Legacy Planning?
legacy planning

Few things in life are as important as planning for the future of our loved ones. No one knows when their time will come, and it’s crucial to have a plan in place for your family’s future. That’s where legacy planning comes in. This process allows you to designate how you would like to bequeath your assets using legal tools and strategies. Let’s look at legacy planning and some of the benefits of setting up a legacy plan. We’ll also go over some of the different types of trusts that we can set up to protect your assets from taxes, probate expenses, and more!

Protecting Your Assets for Future Generations

With legacy planning, you can carefully work out your family’s future. Trusts are a legal tool that we can use to help shield your assets from the many dangers to your financial legacy, including:

Estate Taxes

An irrevocable trust protects your assets after you die from estate taxes by removing the assets from your taxable estate. This is especially important if you have a large estate.

Medicaid Recovery

If you need nursing home care and are on Medicaid, the state can recover some of its costs by taking money from your estate after you die. An irrevocable trust can help protect your assets from this so that you can pass them down to your loved ones.

Probate Expenses

When you die, the assets in your estate must go through a legal process called probate. Probate is often expensive and time-consuming, and it’s one of the reasons people choose to set up trusts. With a trust, the assets don’t have to go through probate, which can save your loved ones both time and money.

Publicity of Probate

Avoid the public display of your assets and home inventory after you pass away.

Family Disputes

Family disputes or frivolous family lawsuits can eat away at your estate. These disputes come about because everyone knows what you left to everyone else.

Will Contestations

You can prevent these attacks on your last wishes by setting up a trust. With a trust, your trustee settles the estate according to the terms in your trust and in your will. Your trustee handles the entire process without the court system of probate. Your estate inventory and desires remain private.

Fraudulent Creditors

The public nature of the probate process can bring fraudulent creditors who want a piece of your estate. Trusts can prevent them from seeing your estate inventories and making claims on your estate.

Bankruptcy or Civil Lawsuits

If your heirs are in danger of facing a lawsuit, divorce, or bankruptcy and receive a lump sum inheritance, the entire amount could go to their creditors or an ex-spouse. Your trust can help protect your assets from seizure.

Irresponsible Spending Habits of Heirs

Gambling, drugs, or other expensive addictions of heirs can eat away their inheritance. With a trust, you can place restrictions or limitations on when and how much they receive.

Trusts Benefit Your Life Now

Some trusts benefit you now and also help your family later. With an irrevocable type of trust, you save money for your heirs in all the ways listed above. However, you also benefit in your own life now by protecting your assets from:

Income Taxes

You don’t have to pay taxes on the assets in your trust. Your trust pays taxes for its own income, much like a separate business entity.

Qualifying for Medicaid

Medicaid benefits can cover long-term care, but to qualify, many individuals spend down almost all of their assets! Individuals across the country are desperately spending down everything they own to qualify for Medicaid coverage for a nursing home, assisted living, or home health aide!

70% of people 65 years and older now will need long-term care for some years. Medicare and health insurance will not cover these expenses.

Medicaid can cover long-term care expenses if you qualify. Placing assets into a Medicaid planning trust at least five years before you need Medicaid benefits can help you qualify for benefits while ALSO:

  • Caring for Your Needs: The trustee you appoint gives you income below the income limit so that you still qualify for Medicaid benefits while having money for the extras you need. You also don’t have to sell your assets in a Medicaid spend-down. They stay safe in your trust, protected from nursing home or assisted living costs.
  • Giving a Future Financial Legacy: With a Medicaid planning trust, your assets are safe and go to your heirs instead of a Medicaid spend-down.

Your Own Bankruptcy or Civil Lawsuits

If you place assets into a trust and then declare bankruptcy years later, your bankruptcy judgment will not touch your assets. The trust protects and shields your assets from financial judgments.

Special Needs Trusts

In addition to the many benefits listed above, trusts can help you pass wealth to heirs with special needs who cannot receive a lump sum inheritance without losing their government benefits. If they lose government benefits, they lose the inheritance paying for everyday expenses that the government would have covered.

With a Special Needs Trust, you can pass on a qualifying monthly income to a differently-abled or special needs heir rather than a lump sum. This monthly income amount doesn’t disqualify them from benefits they need, including health insurance, living expenses, or transportation needs. With a special needs trust, these heirs can enjoy an inheritance just like the rest of your grandchildren or children.

Plan Your Legacy with Trusts

There are many different types of trusts that we can set up to help protect your assets. The kind of trust that’s right for you will depend on your unique circumstances. Some of the most common types of trusts are:

  • Medicaid Planning Trusts
  • Irrevocable Trusts
  • Testamentary Trusts
  • Revocable Living Trusts
  • Legacy Planning Trusts
  • Special Needs Trusts

Each of these trusts has unique benefits that can help you protect your estate and provide for your loved ones after you’re gone.

We Can Help

At Vail Gardner Law, we stay current on the laws that affect your financial affairs and your legacy for the future. We understand how crucial it is to care for family and loved ones while caring for yourself. Contact us for a consultation to discuss the best way to make your estate plan and protect your family’s future.

Contact us

Get in touch

Let Us know how we can help you

Contact

For Mail only: 732 9th Street, #621,
Durham, NC 27705
Telephone: (919) 246-6676

Service Area

NC, Durham, Raleigh, Chapel Hill, Cary, Morrisville, Hillsborough, Research Triangle Park