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COMPARISON BETWEEN TRANSFERS TO CHILDREN’S TRUSTS AND TRANSFERS TO INDIVIDUALS

Posted by: Begley Law Group

by Thomas D. Begley, Jr., CELA The following chart compares the advantages and disadvantages of an outright transfer of assets and putting assets in a Children’s Trust. Trusts v. Transfers Comparison Issue                    Children’s Trusts      Individuals Look-Back Five Years Five Years Control None None Risk Avoidance Yes No Estate Recovery Maybe No Income Tax Parent Children Gift Tax Maybe Yes Step Up in Basis Yes No Principal Residence Exclusion Yes No    

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Filed under Estate and Trust Administration.

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FUNDING AND TAX CONSIDERATIONS INVOLVING CHILDREN’S TRUSTS IN MEDICAID PLANNING

Posted by: Begley Law Group

by Thomas D. Begley, Jr., CELA Funding Many clients who use Children’s Trusts as part of their Medicaid planning are non-crisis planning clients. They either have an early diagnosis or are elderly but in good health. They are doing advance planning and want a sense of independence. They do not want all of their assets in a trust. Good practice dictates that the lawyer have a discussion with the client and determine how much the client feels should be kept out of the trust to give the client a feeling of comfort. The client should understand that the funds retained […]

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Filed under Blog, Medicaid Planning, Medicaid Planning.
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CHILDREN’S TRUSTS AND MEDICAID PLANNING

Posted by: Begley Law Group

by Thomas D. Begley, Jr., CELA (Originally published in the June issue of “The Straight Word”) Under a Children’s Trust typically a parent transfers assets to an irrevocable trust for the benefit of her children and reserves no right to access to either income or principal. One or more children usually serve as trustee. The trust document authorizes the trustee to distribute income and principal to children, subject to the approval of a trust advisor who is not a trust beneficiary. The trust advisor may be a spouse of a trust beneficiary or even an attorney or law firm. A […]

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Filed under Medicaid Planning, Medicaid Planning.
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CHILDREN’S TRUSTS

Posted by: Begley Law Group

by Thomas D. Begley, Jr., CELA A common Medicaid Planning strategy is to transfer assets to third parties, wait for the five-year lookback to expire and apply for Medicaid. If assets are transferred to children, there are certain risks to be considered. If the child is sued by a creditor, the assets transferred by the parent to the child are subject to the claims of the creditors. If the child is subsequently divorced, the son or daughter-in-law may be able to claim additional funds by virtue of the assets that were transferred by the parent to the child. Basic divorce […]

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Filed under Estate and Trust Administration, Estate Planning.
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We provide elder law services in the following areas:
New Jersey and Pennsylvania Medicaid Planning, Medicaid Applications, Asset Protection, Special Needs Trust, Estate and Trust administration and Estate Planning.
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