Martin Folino - Your Living Trusts Attorneys - Dayton Ohio

Understanding the need for a living trust starts with knowing what questions to ask. These are some of the common concerns about living trusts. Every case is different so please feel free to call our office and discuss your specific concerns about setting up a living trust or even deciding if you need one. We handle many cases from drafting of wills, probate matters, and helping those that need to do so set up a living trust.

 

What You Should Know About Living Trusts

Common Questions About Living Trusts

Living Trusts

Many common question and misconceptions about living trusts come up time and again. These are some of the most common.

WILL A LIVING TRUST HELP ME WHILE I AM LIVING?

A “living trust” may provide a structure for the management of a person’s assets.  This structure could be particularly useful if the trustee has investment expertise, such as a trust company, or the trustee retains investment counsel.  The asset management function of a “living trust” can become particularly important if the grantor becomes incompetent or is otherwise incapable of handling financial affairs.  If a “living trust” is in place, it is not then necessary to have a guardian appointment by the probate court to administer the now incompetent grantor’s assets.  On the other hand, the execution of a “durable power of attorney”-a document by which an individual (the principal) gives another person (the attorney-in-fact) the power to manage the principal’s assets-also avoids the necessity of a court guardianship.

 

WILL A LIVING TRUST SAVE INCOME TAXES?

No.  The income of the “living trust” will be taxable to the grantor as if the trust did not exist for income tax purposes.  Also, if the grantor is not the trustee nor a co-trustee, then the “living trust” must obtain a separate taxpayer identification number and thereafter file annual tax returns.

 

WILL A LIVING TRUST PROTECT MY ASSETS AGAINST CREDITORS?

Creditors are entitled to reach the assets of a “living trust” during the grantor’s lifetime.  Even where the trust is irrevocable, if the transfer is made to that trust while there are unpaid creditors of the grantor, creditors can generally reach the assets of the trust.  Creditors may generally reach the assets of any trust to the extent that the grantor can enforce his or her own rights to trust assets.  Upon the death of the grantor, creditors of the grantor may or may not be barred from enforcing claims against a “living trust,” depending upon the circumstance of creation and administration of the “living trust.”  A surviving spouse may not have elective share (“forced inheritance”) rights against a “living trust” as would be available against probate assets.

 

CAN I PRESERVE ASSETS IN A LIVING TRUST AND STILL QUALIFY FOR MEDICAID? 

No.  The assets in a “living trust” are “countable resources” for purposes of Medicaid qualification.  The assets in the “living trust” are treated just the same as if they were owned by grantor.

 

IF I DECIDE A LIVING TRUST MAY BE RIGHT FOR ME, HOW SHOULD I GO ABOUT SETTING ONE UP?

If you decide that the use of a “living trust” may be right for you or if you are uncertain whether a “living trust” would be beneficial, we would be happy to discuss your goals for the use of your property during life time and following death.  At that time, we will be able to provide you with an estimate of legal and other expenses involved with the drafting and implementation of a “living trust”.

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