NYC Trust Lawyers

A type of irrevocable trust is the Medicaid Asset Protection Trust which helps preserve wealth for future generations, as well as avoiding losing or spending down assets to long-term care costs. The principal in such trusts is not counted as a resource, which carries the powerful advantage when applying for long-term care government benefits. To avoid Medicaid’s look-back period for nursing homes, the trust must be funded at least five years before applying for benefits. At the present time, there is no look-back for Medicaid home care after transferring assets into a trust in New York.

Supplemental Needs Trust

A supplemental needs trust, also known as a special needs trust (SNTs), allows family members to leave property or money to a beneficiary with special needs without disqualifying the beneficiary from any government benefits they may be receiving. SNTs are either first-party or third-party.

A first-party SNT is created by the recipient of the government benefits and must be irrevocable. These SNTs have a payback provision that, upon the recipient’s death, the government is repaid for the care received during their lifetime. A third-party SNT is created by a party other than the individual receiving government benefits. There is no government payback requirement.

Testamentary Trust

A testamentary trust, created as part of a grantor’s estate plan, goes into effect upon their death. This trust can hold financial assets or personal property, personal papers, real estate, and other valuable holdings.

A testamentary trust must comply with New York estate planning requirements and requires approval by the court.

Irrevocable Life Insurance Trust

Placing ownership of a life insurance policy in an irrevocable trust exempts the value of the policy from the grantor’s taxable estate. Upon death, the proceeds are payable to the trust and distributed to the trust beneficiaries without estate tax.

Charitable Trust

A charitable trust allows the grantor to benefit either a specific charity or a charitable purpose without the formalities otherwise necessary to set up a non-profit corporation to serve the same purpose.

Beneficiary Controlled Trust

Also known as a bloodline trust, a BCT protects the assets you pass down to your children. These trusts manage the risks from third-party claims after your death, such as your child’s loss of a lawsuit with a large cash verdict that could mean the creditor could go after inherited assets.

BCTs can protect your children and grandchildren from financial drains on their inheritances from divorces, bankruptcies, court judgments, and the like.

Spendthrift Trust

A spendthrift trust limits the amount of money that the beneficiary receives, protecting it from most of the beneficiary’s creditors.