New York Estate Planning & Elder Law Blog
At Ettinger Law Firm, we are fond of saying “trusts create order out of chaos” — for three major reasons:
First, as noted in previous columns, an ever-increasing number of Americans suffer a period of legal disability later in life. Without your own private plan for disability, consisting of a trust and a “prescription strength” elder law power of attorney, you run the risk of a state appointed legal guardian. Do you want the people you choose to be in charge in the event of your disability, with the freedom to act immediately in your best interests, or do you want the state to appoint someone who will require court permission to protect your assets and your family — which permission is sometimes denied. A guardianship proceeding is expensive, time-consuming and stressful — in other words, chaotic. Trusts create an orderly process whereby your appointed trustees consult with your elder law attorney and are free to act immediately without court interference.
Secondly, trusts avoid probate court proceedings on death whereby wills, even though supervised by an attorney, with two witnesses and a notary, must first be proven to be valid in court proceedings. The client has no control over probate court proceedings – the time they will take or the amount they will cost. Typically, it takes months and, not unusually, one to two years or more. Meantime, property cannot be sold and assets cannot be reached to pay bills. In other words, chaos. With a trust, the trustee may act immediately upon death, list property for sale and access investments and bank accounts.
Thirdly, wills provide no plan for protecting your home and life savings either from the cost of in-home care or nursing home care. Nothing is more chaotic then seeing one’s home and life savings used up in a few short years to pay for the high cost of long-term care. Properly drafted Medicaid Asset Protection Trusts (MAPT) protect your assets from long-term care costs and allow you to leave a legacy to your children and grandchildren. When the time comes, your MAPT will allow you to qualify for Medicaid benefits for your care at home or in a facility.