Transferring assets may be a part of estate planning and financial protection for seniors. However, the issues surrounding asset transfers can be complex. That’s why seniors and their families should work with an elder law attorney. Your attorney can help you achieve various goals while securing assets.
This is part two of a series about how attorneys can help seniors with asset transfers. It will examine different strategies and ways lawyers can help. Part one focused on the goals seniors can achieve with asset transfers.
Working With an Elder Law Attorney to Transfer Assets
Seniors can deploy a few strategies for managing and transferring assets. Let’s look at a few before moving on to how an attorney can help.
- Revocable Trusts: A revocable trust allows you to retain control of your assets during your lifetime. You can also make changes as needed. The trust’s assets are still under your ownership. That means they have no protection from creditors and will count toward Medicaid eligibility. Upon your death, assets in the trust avoid probate, streamlining the process for heirs.
- Irrevocable Trusts: Irrevocable trusts provide more robust asset protection since the assets are no longer legally yours. However, you cannot easily modify these trusts; the rules are stricter than revocable trusts. This option can help you shield assets from creditors and gain Medicaid eligibility. However, you must make the transfers before the five-year lookback period.
- Gifting Strategies: Attorneys can recommend gifting assets, but you must keep gifts under the annual gift tax exclusion. At the time of writing, the annual exclusion is $18,000. Keeping gifts under the annual exemption reduces your taxable estate while avoiding additional taxes. However, improper gifting can also impact Medicaid eligibility, so you must be careful.
Navigating Legal Issues with An Elder Law Attorney
Complex state and federal laws govern asset transfers. Simple mistakes could result in high taxes or delay your Medicaid eligibility. Your attorney can ensure transfers comply with relevant laws to protect you from legal and financial complications.
Avoiding Common Mistakes
Careless transferring of assets can result in costly errors. You might exceed the limit for gift taxes and incur a tax liability. Failure to transfer assets could also result in you losing Medicaid coverage. You could fail to make beneficiary designations or update them as their circumstances change. An attorney will help you avoid these and other pitfalls.
Customizing Strategies
Every senior’s financial and estate planning needs are unique. A knowledgeable attorney can tailor strategies to fit your age, goals, health, finances, and family dynamics. They can advise on types of trusts, gifting strategies, and other issues. An attorney can also plan for future problems to ensure your plan has the necessary flexibility.
Do you need help with estate planning or asset protection? Click here to contact the Scott Law Offices. Our elder law experts are dedicated to helping seniors and their families. Reach out now to learn more about our services.
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