Advanced Estate Planning

Advanced Estate Planning

Business Protection, Asset Protection, and Business Succession Planning

Closely-held businesses need proper guidance and advanced planning legal advice. Planning is critical for high net worth couples and families, especially retirees and seniors. When one owns multiple real estate properties or business interests, asset protection is critical to protect your hard-earned assets from litigation threats. Often, we see real estate investments being owned by a husband and wife and is vulnerable to lawsuits and threaten a couple’s retirement plan. Gateville Law Firm help seniors with their Retirement Plan and Living Trust estate planning goals. Sean Robertson of Gateville Law Firm is a successful business planning and asset protection attorney. Our firm concentrates on advanced estate planning, asset protection planning, and retirement planning for seniors and professionals.

Living Trust and Advanced Estate Planning

A Living Trust is an excellent legal planning strategy to ensure your family has peace of mind upon your death. With a Living Trust, your Trust Agreement outlines your wishes in how you distribute your assets upon your death. There are several benefits that a Living Trust, otherwise known as “Family Trust” or “Revocable Living Trust,” provide.

Avoid probate court.
Unlike last a Last Will and Testament, a Living Trust avoids probate court if properly funded. Often, seniors are concerned about their in-laws inheriting their assets upon their death due to a divorce-related concern. A major part of a living trust and advanced estate planning is planning for unexpected events such as your beneficiary’s divorce, creditor concerns, and/or special needs concerns.

A Living Trust provides the ability to set up a Special Needs Third-Party Trust to shelter a beneficiary’s assets from their disability or special needs concern.
An increasingly common issue is protecting one’s assets from the threats of nursing home care. For example, we often hear of a spouse that has lost the ability to make their own decisions and their assets are threatened by nursing homestays. The look back rule pertains to seniors applying for Medicaid. Generally, the look back period begins on the date of a person’s Medicaid application. For example, Sue Smith must have nursing home care and the cost of nursing home care is between $5,000 and $7,000 per month and must spend down their assets prior to applying for Medicaid. After applying for Medicaid, the State of Illinois can review a person’s assets or transfers such as a gift of a family home and other assets for a period of 60 months.

A Living Trust is a private document, unlike a Last Will and Testament.

Online bank fraud and other identity theft are growing concerns. A Last Will and Testament must be filed within 30 days at the local courthouse and is public knowledge. In contrast, a Living Trust is a private document that does not require any notice to potential heirs and legatees.

Retirement Plans and IRA Estate Planning

Many seniors posess individual retirement accounts (“IRAs”), 401(k) plans, and other retirement assets, but a Living Trust should not be the beneficiary of such assets. A Retirement Plan Trust or otherwise known as “IRA Inheritance Trust” are increasing in popularity because there are two major concerns that they address.

A Retirement Plan Trust provides the ability to shelter assets from a beneficiary’s creditor concerns.
For example, Ann and John Smith are self-employed professionals that experienced difficult times during the early 2000s. The Smith family received a judgment against them for unpaid rent due to closing their retail business in 2005. Ann Smith’s mother passes away and leaves her money through her 401(k) and IRA worth $150,000. Ann and John Smith’s creditor keep seeking to enforce their judgment and turn their judgment into money. Ann and John Smith decide to file for bankruptcy protection and find out Ann’s inherited IRA will be lost if they do so because inherited IRAs do not have creditor protection, unlike IRAs.

The courts have determined that inherited IRAs do not enjoy creditor protection because they do not have qualified retirement status as they did when the original owner set up the retirement account. Qualified retirement plan status allows asset protection against bankruptcy matters, but this status only applies to the original owner of the retirement plan account. The Retirement Plan Trust solves the beneficiary’s creditor protection because Trust Agreements have spendthrift provisions, which protect a beneficiary’s inheritance upon a death.

Retirement Plan Trusts provide the ability to defer taxes and stretch retirement assets, saving thousands of dollars in taxes.
If senior has a beneficiary that is not good with money, it’s natural that they are concerned about the family member cashing out the inherited 401(k) or IRA, losing thousands of dollars in lost income tax benefits and tax deferrals. A Retirement Plan Trust shelters these assets. In addition, a Retirement Plan Trust is an excellent vehicle to protect a those with special needs and disabilities. More seniors and their family members are facing special needs and nursing home care. Sheltering retirement assets from a nursing home is vital to protect one’s assets.