A trust is a contract that determines who will manage one’s assets, see to it that debts and bills are paid, and properly distribute your property in accordance with your wishes upon your death. A trust may be used to protect both real estate and personal property from collections or creditors.
In a trust the “trustee” holds legal title to the property in the trust for the benefit of “beneficiaries.” Trustees are responsible for the trust property and as such may generally do as they please with the trust property, within the restrictions of the trust. The main advantage of a trust is that, if assets are titled correctly, these assets can pass to those named as beneficiaries without going through the North Carolina probate process.
Trusts are especially helpful for those with special needs who may require more than their supplemental benefits provide. A special needs trust may be created to provide for the future care of a loved one. Your child, sibling, or relative may require additional needs for their medical care. If you don’t plan carefully you may jeopardize their ability to receive benefits such as Supplemental Security Income and Medicaid benefits.
Inheriting assets such as a house, car, and other personal effects will not affect eligibility for SSI and Medicaid. However, inheriting other assets such as cash may prevent your loved one from receiving much needed benefits. If the trust is properly setup and administered, SSI and Medicaid administrators will ignore the trust because your loved one will have no control over the assets in trust. Thankfully, Federal and North Carolina laws allow for the creation of special needs or supplemental needs trusts for recipients of SSI and Medicaid as long as certain requirements are met. The Piemonte Law Firm is dedicated to helping your family plan for the future.