Elder Law |Do You Know The Pros and Cons
Elder Law | One of the main reasons that people hire elder law attorneys is for assistance in setting up livingtrusts. A living trust is a legal arrangement in which the legal title of certain property, including real
estate and cash, is transferred to a trustee who then holds it for the benefit of a third person, who is
known as the beneficiary. Every detail of the arrangement is outlined in the trust document. The
primary purpose of a living trust is to ensure that in the event that a person becomes incapacitated
and unable to manage their assets, a trustee will be entrusted to do so.
Pros of Living Trusts
The main advantage of establishing a living trust is knowing, that in the event of becoming
incapacitated, detailed instructions regarding the management of the person’s assets have been given
and will be followed. Living trusts are also advantageous because if the appointed trustee dies or
becomes incapacitated too, the trust document provides instructions on who should succeed them.
Living trusts are recognized in all 50 states, and brokerages and banks recognize them. Perhaps most
compelling of all is the fact that with a living trust, a pricey probate process is typically avoided.
Cons of Living Trusts
As long as an experienced and competent elder law attorney draws up a living trust, it should suffice
to protect the individual’s assets. However, if the person fails to fund the trust by transferring the
titles of the assets that are to be included, it will be invalid. Further, the individual must continue to
update the titling for newly acquired assets, or they will be left out of the trust. Finally, living trusts
won’t help someone avoid a Medicaid spend down because each asset is regarded as a countable
asset. This is true even if it was considered exempt prior to being included in the trust.
These and similar issues are best managed and handled by an experienced elder law lawyer.