by April Harris Jackson | Apr 30, 2021 | Estate Plan
Trusts are an excellent tool for estate planning and asset protection purposes. The most common type of trust is a Revocable Living Trust, which holds your assets and helps avoid the probate process when you pass away. However, Revocable Living Trusts do not help much when it comes to asset protection planning.
What Can I Do with a Revocable Living Trust?
A Revocable Living Trust is an essential tool for avoiding probate. If you own enough assets to qualify for a full probate proceeding when you pass away, then you will most likely benefit from a Revocable Living Trust. Assets placed in the trust, such as a home and financial accounts, can pass to your beneficiaries without going through the probate process. This saves your loved ones time and money and provides a level of privacy for your personal affairs. A successor trustee of your choosing can also manage any finances you place in your Revocable Living Trust if you ever become incapacitated, or even if you just do not care to handle your own financial affairs anymore.
Will a Revocable Living Trust Protect My Assets?
Revocable Living Trusts do not protect assets from financial predators. If you owe money to creditors, then those creditors may take assets from your trust, even though the trust is technically the legal owner of the assets. Your Revocable Living Trust is not suitable for asset protection purposes because you are still considered the owner of the assets if you are the trustee because you have complete control over the trust. There are no restrictions on how you can spend the assets in the Revocable Living Trust, and you can revoke the trust at any time. Revoking the trust means the assets will revert to your direct ownership, putting them back under your control. In addition, all assets in the Revocable Living Trust are reported to the IRS for tax purposes under your Social Security number, meaning there is even less separation between you as an individual and the Revocable Living Trust. This is different from Irrevocable Trusts, which have their own tax identification numbers.
If you are interested in learning more about how certain Irrevocable Trusts can be used for asset protection purposes, or if you’d like to learn more about estate planning with a Revocable Living Trust, simply set up a consultation with a our Nashville trust attorney to talk about how we can help.
by April Harris Jackson | Apr 12, 2021 | Elder Law
National Healthcare Decisions Day is on April 16th, and it’s an important reminder for every adult to begin having conversations with loved ones about their most private wishes for medical and end-of-life care.
Far too many people assume that their families would make the choices they would want in an emergency. Yet every day we hear stories of adult children, siblings, or other relatives battling during a healthcare crisis over “what their loved one would have wanted” in that situation.
Incapacity Can Happen at Any Age
The coronavirus pandemic has been a reminder to all of us that illness and even incapacity can happen at any age. Over the past year, many adults, for the first time ever, expressed their thoughts about being placed on a ventilator and/or receiving experimental medication should they become seriously ill with COVID-19.
But planning must go beyond an initial discussion. You must also clearly and legally document your preferences, as well as choose an “Agent” whom you trust to make such decisions if you are unable to speak for yourself.
Documenting Your Wishes Takes Pressure Off of Loved Ones
Remember, emotions can run high during a healthcare crisis, and it might be hard for your loved ones to stop life support, for example, when they desperately want you around. Having your wishes spelled out in writing helps provide guidance during a stressful time and makes these types of decisions easier for your loved ones, especially in cases when other family members don’t agree.
How to Start “Tough Conversations” About Medical Care
In honor of National Healthcare Decisions Day, set aside time this month to have conversations with loved ones about your personal preferences for medical or long-term care. Here are some important issues to consider:
- Whom do you trust to make medical decisions on your behalf?
- How do you feel about feeding tubes, life support, and other artificial life-saving devices?
- Is there any type of medical care you would NEVER want?
- If you were permanently disabled or incapacitated, what would contribute or take away from your quality of life?
- What are your thoughts on nursing home vs. in-home healthcare?
- How would you like your family to pay for the care you may need if co-pays become excessive or insurance does not cover your treatment?
We love The Conversation Project for guides to help families have these hard, but important, conversations.
A Final Consideration About Your Choice of Healthcare Agent
One final point to consider when documenting your wishes and choosing a healthcare agent that will ultimately carry them out is that the person you nominate should want to have this responsibility. There are people who do not want or cannot handle making medical decisions– even for their own spouse.
Remember, if the time comes that the healthcare directive needs to be used, it is going to be a very stressful and emotional time for this person. Are they up for the job? Do they want the job? Take the time to have an additional conversation with whomever you are considering ensuring that they can, and are willing to, make the decisions that you would want in a crisis situation.
by April Harris Jackson | Apr 8, 2021 | Estate Plan
More than half of Americans now have at least one chronic health condition, mental health concern, or substance abuse issue. That is a staggering statistic that our Middle Tennessee estate planning lawyer who works with sick and disabled clients confronts every day.
There are varying definitions of what it means to be “chronically ill.” One definition is having a disease that a person will live with for many years. These types of illnesses include diabetes, cardiovascular disease, lupus, multiple sclerosis, hepatitis c, and asthma. Alternatively, some define chronic illness as an inability to perform at least two activities of daily living such as eating, toileting, transferring, bathing, and dressing. Or, the patient may require constant supervision by someone else for health or safety issues.
Regardless of how “chronic illness” is defined, every adult living with a long-term diagnosis should have a few basic legal documents in place to ensure that their wishes are honored and that they are legally and financially positioned to receive the best care possible in the least restrictive environment as possible.
For example, an experienced Middle Tennessee estate planning lawyer can help create legal documents such as Powers of Attorney or Healthcare Directives that appoint someone you trust to pay your bills, access bank accounts, and make medical decisions for you if you are incapacitated or otherwise unable.
Additionally, a Middle Tennessee estate planning lawyer can help you utilize tools such as trusts to protect hard-earned assets from nursing homes, creditors, or predators. A living trust also offers control, as you can set rules and parameters as to how your assets are to be used and managed by a trustee who is overseeing your affairs. A trust can also help pass down your assets outside of probate, which can be a long and expensive process that most Tennessee residents would prefer to avoid.
The bottom line is this: Do not assume that because you are suffering from a chronic illness that it is too late to take steps to better your financial situation or safeguard your family. Even if you (or a loved one) are currently in a nursing home, there may still be options! The first step is to simply contact our office. We will schedule a planning session with you and walk through all of the avenues of protection that could work best for your family.
