Protecting Your House for Your Children

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.

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 TrustA trust that cannot be terminated, revoked or amended by the creating person. In Wisconsin and in estate planning an irrevocable trust can refer to a trust that is set up to protect assets from a nursing home and Medical Assistance if prepared and funded well in advance. See Using Trusts to Protect Assets from Nursing Homes 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 planningPlanning in advance of disability, incapacity, or death to make sure that key life issues have been addressed while the person is still of sound mind and able to understand and sign key documents such as Power of Attorneys, Power of Attorneys for Health Care, Wills, and Trusts to form a strategy and provide for the administration and disposition of his or her assets upon death or upon incapacity. attorneys as a powerful tool for protecting your home and other assets.

The benefits of a properly drafted Irrevocable TrustA trust that cannot be terminated, revoked or amended by the creating person. In Wisconsin and in estate planning an irrevocable trust can refer to a trust that is set up to protect assets from a nursing home and Medical Assistance if prepared and funded well in advance. See Using Trusts to Protect Assets from Nursing Homes include, but are not necessarily limited to the following.

1. 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;
2. 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 TrustA trust that cannot be terminated, revoked or amended by the creating person. In Wisconsin and in estate planning an irrevocable trust can refer to a trust that is set up to protect assets from a nursing home and Medical Assistance if prepared and funded well in advance. See Using Trusts to Protect Assets from Nursing Homes over simply deeding your property to your children;
3. Asset protection advantages to your children, grandchildren, and future beneficiaries
4. Flexibility to nominate different beneficiaries in the event that you change your mind as to who willA written document that sets forth and names the personal representative who will be in charge of overseeing the probate process and names the specific bequest and residual beneficiaries of property who are to receive and inherit assets and property through probate. A Will does not avoid probate, and must be properly drafted and executed to be legal. A Will can also avoid the use of a surety bond in many instances and can help utilize an “informal” Wisconsin probate process if it has the proper clauses and attestation clause. be the beneficiaries of the trustThe arrangement creating the legal ownership of assets by a trustee for the benefit of the Settlor and/or other beneficiaries. upon your death — even after the Irrevocable TrustA trust that cannot be terminated, revoked or amended by the creating person. In Wisconsin and in estate planning an irrevocable trust can refer to a trust that is set up to protect assets from a nursing home and Medical Assistance if prepared and funded well in advance. See Using Trusts to Protect Assets from Nursing Homes has been established, through the use of a retained “power of appointment.”
5. Avoidance of the ProbateThe court process proving the validity of a Will and conducting the orderly Inventory, Accounting, and Administration of a decedent’s assets under a Will or under Intestacy laws if there is no Will. The probate process in Wisconsin typically takes between six to twelve months in Wisconsin and can take longer in some cases. Probate can be avoided by proper Estate Planning and through the use of beneficiary designations, Transfer on Death Deeds, Marital Property Agreements and Trusts. Court on assets in the trustThe arrangement creating the legal ownership of assets by a trustee for the benefit of the Settlor and/or other beneficiaries..
6. 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 trustThe arrangement creating the legal ownership of assets by a trustee for the benefit of the Settlor and/or other beneficiaries. for young beneficiaries and grandchildren.
7. Retention of the right to receive income from the trustThe arrangement creating the legal ownership of assets by a trustee for the benefit of the Settlor and/or other beneficiaries. as and where needed if this is a concern and if it willA written document that sets forth and names the personal representative who will be in charge of overseeing the probate process and names the specific bequest and residual beneficiaries of property who are to receive and inherit assets and property through probate. A Will does not avoid probate, and must be properly drafted and executed to be legal. A Will can also avoid the use of a surety bond in many instances and can help utilize an “informal” Wisconsin probate process if it has the proper clauses and attestation clause. provide additional tax benefits.

Of course, this list is not exhaustive. Our highly skilled Irrevocable TrustA trust that cannot be terminated, revoked or amended by the creating person. In Wisconsin and in estate planning an irrevocable trust can refer to a trust that is set up to protect assets from a nursing home and Medical Assistance if prepared and funded well in advance. See Using Trusts to Protect Assets from Nursing Homes 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 planningPlanning in advance of disability, incapacity, or death to make sure that key life issues have been addressed while the person is still of sound mind and able to understand and sign key documents such as Power of Attorneys, Power of Attorneys for Health Care, Wills, and Trusts to form a strategy and provide for the administration and disposition of his or her assets upon death or upon incapacity. is a complex and detailed process. We appreciate that not every estate planningPlanning in advance of disability, incapacity, or death to make sure that key life issues have been addressed while the person is still of sound mind and able to understand and sign key documents such as Power of Attorneys, Power of Attorneys for Health Care, Wills, and Trusts to form a strategy and provide for the administration and disposition of his or her assets upon death or upon incapacity. tool is right for you and your situation. An Irrevocable TrustA trust that cannot be terminated, revoked or amended by the creating person. In Wisconsin and in estate planning an irrevocable trust can refer to a trust that is set up to protect assets from a nursing home and Medical Assistance if prepared and funded well in advance. See Using Trusts to Protect Assets from Nursing Homes is a complicated planning tool that has to be very carefully drafted so as to take advantage of the tax, creditor, nursing home protection, beneficiaryA person who will receive something, possibly cash or real estate or personal property, through a Will or trust or income from a Will or Trust. A beneficiary can be a Specific Bequest beneficiary or a Residual beneficiary. protection, and probateThe court process proving the validity of a Will and conducting the orderly Inventory, Accounting, and Administration of a decedent’s assets under a Will or under Intestacy laws if there is no Will. The probate process in Wisconsin typically takes between six to twelve months in Wisconsin and can take longer in some cases. Probate can be avoided by proper Estate Planning and through the use of beneficiary designations, Transfer on Death Deeds, Marital Property Agreements and Trusts. avoidance possibilities. At Wokwicz Law Offices, we only enter into an Irrevocable TrustA trust that cannot be terminated, revoked or amended by the creating person. In Wisconsin and in estate planning an irrevocable trust can refer to a trust that is set up to protect assets from a nursing home and Medical Assistance if prepared and funded well in advance. See Using Trusts to Protect Assets from Nursing Homes after detailed discussions and meetings with our clients, going over all of the options, and the advantages and risks versus other estate planningPlanning in advance of disability, incapacity, or death to make sure that key life issues have been addressed while the person is still of sound mind and able to understand and sign key documents such as Power of Attorneys, Power of Attorneys for Health Care, Wills, and Trusts to form a strategy and provide for the administration and disposition of his or her assets upon death or upon incapacity. 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 TrustThe arrangement creating the legal ownership of assets by a trustee for the benefit of the Settlor and/or other beneficiaries. 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.