May 6, 2014
A Brief Discussion of the Advantages of Irrevocable Trusts in Wisconsin
As with a great many things in the tax planning and asset protection, the 2013 Wisconsin Budget Bill has drastically affected the best ways for protecting your house for your children.
Many of our clients want to leave their house to their children or grandchildren when they pass away. They are comforted with the idea of making sure that their children and grandchildren have a safe place to live or being able to pass on an asset of significant value. As parents ourselves, our estate planning attorneys very much understand this most human of desires.
Stop Nursing Homes From Taking Your Assets
With proper advanced planning, you can protect your assets from nursing homes.
In recents years, the lawyers at Wokwicz Law Offices have previously discussed an approach for using trusts to protect assets from nursing homes.
Protecting Your House for Your Children and Grandchildren
In our view, the biggest advantage of an Irrevocable Trust is its ability for protecting your house for your children and your grandchildren, as well as potentially protecting other assets.
Additional Advantages of Irrevocable Trusts
Following the changes brought about by the new Wisconsin Budget Bill, Irrevocable Trusts have become one of the favored methods among experienced estate planning attorneys as a powerful tool for protecting your home and other assets.
The benefits of a properly drafted Irrevocable Trust include, but are not necessarily limited to the following.
- Protection of your home from nursing home costs if the planning is completed at least five years in advance of needing to apply for medical assistance;
- Preservation of a tax advantage for your children with a “step-up in basis” to the fair market value of your house upon your death, thereby avoiding capital gains taxes for your children after you pass away. This is one of many significant advantages of an Irrevocable Trust over simply deeding your property to your children;
- Asset protection advantages to your children, grandchildren, and future beneficiaries
- Flexibility to nominate different beneficiaries in the event that you change your mind as to who will be the beneficiaries of the trust upon your death — even after the Irrevocable Trust has been established, through the use of a retained “power of appointment.”
- Avoidance of the Probate Court on assets in the trust.
- Provision of continuing trusts for your beneficiaries after your passing, if they are unable to handle their share of the distribution and provide for continued trust for young beneficiaries and grandchildren.
- Retention of the right to receive income from the trust as and where needed if this is a concern and if it will provide additional tax benefits.
Of course, this list is not exhaustive. Our highly skilled Irrevocable Trust attorneys would be delighted to meet with you to discuss the specifics of your needs and to answer your questions.
Further Thoughts on Irrevocable Trusts
Proper estate planning is a complex and detailed process. We appreciate that not every estate planning tool is right for you and your situation. An Irrevocable Trust is a complicated planning tool that has to be very carefully drafted so as to take advantage of the tax, creditor, nursing home protection, beneficiary protection, and probate avoidance possibilities. At Wokwicz Law Offices, we only enter into an Irrevocable Trust after detailed discussions and meetings with our clients, going over all of the options, and the advantages and risks versus other estate planning options.
As with all of the content on this site, we intend this information only as introduction to these issues. We invite you to contact the Trust attorneys at our firm to help craft an estate plan that is right for you and your family. We’re committed to protecting your house for your children and grandchildren.