Many people who are interested in asset protection will consider the creation of DIY living trusts as a means of keeping their property secure. While living trusts can be a useful took in protecting your assets in certain ways, these living trusts also have substantial limitations. Furthermore, there are strict rules to follow for trust creation. Because you don’t want to make a mistake and use the wrong type of trust or make an error and not create a trust correctly, it is generally a bad idea to create a living trust on your own.
Rather than opting for DIY living trusts, those who want to protect their assets and who want to plan for their future should consult with a White River Junction trust lawyer. A trust lawyer can provide invaluable advice about all of the different legal tools that can be used to protect assets, including different kinds of trusts.
Unsworth LaPlante, PLLC provides affordable estate planning advice, including help with trust creation and with asset protection. It is worth making the investment to get the right legal help, because it is often too late to undo mistakes in the estate planning process by the time the errors are discovered.
When you have professional legal help, you can rest assured that everything was done right, that the right types of tools were used, and that you achieved your desired goals in trust creation.
Should You Create DIY Living Trusts
While living trusts are often useful and it can make sense to create them, DIY living trusts are typically a bad idea. Vermont law sets forth the rules for trusts in Title 14A: Trusts. These rules are complex and if you make mistakes, fail to set up the trust correctly, or do not properly fund the trust, you could end up not actually getting the protections that you expected to get.
The first thing to be aware of is the limitations of living trusts. Living trusts do not protect you from having your assets counted for purposes of determining whether you can qualify for Medicaid coverage. As a result, living trusts are not the best solution if you are worried about long-term care costs and you believe that you may end up losing your assets if you have to go into a nursing home.
Living trusts also don’t shield your estate from Medicaid estate recovery, which means that if you have used a living trust and Medicaid pays for some of your medical care costs, the state could try to get money or property from the living trust after your death to recoup the money spent on your care.
Living trusts are also not going to be useful in preventing estate taxes from being charged on your estate. If your estate exceeds the excludable federal limit, which is $5.45 million as of 2016, then estate taxes will be assessed even if you have money or property in living trusts. The trust assets will be considered as part of the value of your estate and will count for determining if you exceed the excludable federal limit.
There are other kinds of trusts that can be used to protect your assets in case you need Medicaid coverage, as well as to protect your assets from Medicaid estate recovery and to prevent the assets from being counted when determining the taxable value of the estate for tax purposes. Because there are so many different kinds of trusts, each of which have different features and each of which serve different goals, DIY living trusts are not going to be a good approach since you may not be creating the best trust for your needs.
Getting Help from a White River Junction Trust Lawyer
When you want professional help with estate planning and trust creation, the best place to turn is to a White River Junction trust lawyer. Unsworth LaPlante, PLLC understands the rules and requirements for all different kinds of trusts and will help with both the creation of a living trust as well as with the use of other estate planning tools.
To learn more about DIY living trusts and about how attorneys help with trust creation, join us for a free seminar. You can also give us a call at (802) 879-7133 or contact us online today so we can help you to create trusts to protect your assets and so we can assist you with all aspects of creating a comprehensive estate plan that will protect your legacy and help you to achieve your goals for the future.