Protecting the assets of elderly citizens

| Mar 2, 2021 | Elder Law

Elderly citizens may wish to safeguard their assets from creditors and others. Seniors often wish to leave a legacy for their loved ones and know that their assets will not be reduced by third-party claims. There are a few things that seniors in Pennsylvania and other states should know when protecting their assets.

Trusts

A trust is a great way to protect the assets of an elderly citizen. A trust is a device through which a settlor grants money to be used by a trustee in order to help specified beneficiaries. There are two types of trusts: revocable trusts that can be retracted by a settlor and irrevocable trusts that cannot be terminated by a settlor.

Assets that are given to establish an irrevocable trust are ordinarily not deemed to be assets of the settlor and may not be considered part of their estate when qualifying for Medicaid, satisfying the judgments of creditors and in other circumstances. Establishing a trust creates many tax and estate issues, so it is important to speak with an experienced elder law attorney before creating a trust.

Gifting assets to a loved one

Gifting assets to a loved one is another way to protect your assets. In many circumstances, if assets are in the possession of a loved one, they cannot be reached by the creditors of the person who made the gift. In certain circumstances, gifting assets before death may impact your estate plans, so it is important to speak with counsel before gifting substantial assets.

Retirement plans

Certain types of retirement options, including 401(k) accounts, pension plans and other assets, may be exempt from collection efforts. As a result, it might be prudent to keep money in such accounts in certain circumstances.

Charitable remainder trusts

Seniors who wish to make a donation to a charity and protect their assets could consider a charitable remainder trust. This may permit clients to receive money during their lifetime and gift remaining funds in the trust to a charity after their death.

Anyone considering such a trust should speak with counsel to discuss the complicated issues surrounding such trusts. An experienced elder law attorney may help a senior safeguard their assets for the next generation.