Trusts

[Adverse]

Jurisdiction

Florida

For 20 years or so I have been trying to find definitive information about how to 1.) protect personal assets from litigation, debt collectors and nursing homes, and 2.) avoid probate.

Is this a good place to discuss that?

 

[zddoodah]

Yes.

 

[Adverse]

OK, then I'll say more.

From my years of "studying" I have deduced that you cannot protect your assets from litigation, debt collectors and nursing homes using a Revocable (Living) Trust. You have to do that through an Irrevocable Trust, where you actually give up your assets.

In my search I had a Trust "expert", I believe from Michigan, sorta latch onto me, soliciting our business at a pretty high fee relative to our asset level. When I searched his background, I found that he tried to protect his assets by putting them in a trust, and then he put his trust in a trust. The Court ruled that since he put all of this assets in the trust, they were still his assets, so what he did accomplished nothing.

Also, we have had friends who got "caught-up" in the 5-year look-back when their parents went to a nursing home. One couple has just put their assets in two trusts. When I asked the husband he said, "(His wife) took care of all of that." I asked if they were Revocable Trusts and he said Yes.

I recently noticed that just about all of our (older) neighbors have their houses in Trusts.

Let's start the conversation with that.

 

[zddoodah]

I have deduced that you cannot protect your assets from litigation, debt collectors and nursing homes using a Revocable (Living) Trust. You have to do that through an Irrevocable Trust, where you actually give up your assets.

That's generally accurate, but it overlooks the fact that any transfer of assets for the purpose of putting assets out of the reach of an existing creditor is subject to being set aside as a fraudulent transfer.

and then he put his trust in a trust.

That doesn't make any sense. Assets can be put in a trust, but a trust is not itself an asset that can be "put in" another trust.

Also, we have had friends who got "caught-up" in the 5-year look-back when their parents went to a nursing home.

Based on my experience on this and other legal message boards, this is a much bigger issue than it should be. Why folks want to preserve their ability to get the relatively crappy level of nursing care that medicare will pay for, as opposed to paying for better care (all so they can leave money to their kids) is beyond me.

I recently noticed that just about all of our (older) neighbors have their houses in Trusts.

Putting one's primary residence into a revocable trust has nothing to do with protecting the home from creditors. The primary purpose for doing that is to avoid probate. While probate isn't the horrible evil that lots of folks make it out to be, it's better if it can be avoided. For most folks, their personal residence is their most significant assets, so putting it in a trust allows for a much simpler and less expensive transfer or sale than is possible through probate.

 

[Adverse]

Pretty much the same I've read/seen/heard elsewhere . . . yet people still seem to think they are beating the nursing home issue by transferring assets to trusts.

I never have been and am not now concerned about existing creditors.

Years ago when I first talked to our insurance agent at the time about a personal liability umbrella, he asked, "What is it you want to protect yourself against?," I answered, "I don't know yet, but when it happens I'll know." When "something" happened, the insurance company did not want to accept the claim, but did when I provided the written statements from their agent from years before.

Same here, I'll know what I want to protect our assets from when it happens. I just know that, in general, I want to protect what we have.

 

[Adverse]

I assume the answer is the same if you transfer your assets to an LLC that you and your spouse are the only members of.

I wish I could remember the name of the Michigan trust "expert". he was old school . . . did everything by mail . . . I think he probably typed everything on a Smith Corona. I'd like to google his lawsuit(s).

 

[zddoodah]

I'll know what I want to protect our assets from when it happens.

Once "something happens," it's too late.

 

[Adverse]

Well, duh!

Which is why I'm here, and why we have insurance, and why we have a personal liability umbrella, to prepare for what we don't know what we're preparing for.

Anyone else?

 

[Adverse]

Build A Wall Around Your Assets

I've been reading stuff like this for years, but never have figured out how to get it done. How about that "Family Limited Partnership"?

And this:

http://www.michiganestateplanning.c...-assets-from-medicaid/nursing-home-spend-down

 

[Adverse]

Speaking of LLCs, is that a way of putting assets out of the reach of personal creditors, or judements?

Of course, putting them is harm's way for creditors or judgments for the LLC.

If it is a method to do that, my wife and I would still be in control of assets in the LLC.

 

[zddoodah]

Speaking of LLCs, is that a way of putting assets out of the reach of personal creditors, or judements?

. . .

If it is a method to do that, my wife and I would still be in control of assets in the LLC.

If the LLC exists for no purpose other than to own personal assets, then it's probably a waste of money and chances are relatively good that a motivated creditor would sue the LLC on an alter ego theory.

 

[Adverse]

well, darn

 

[army judge]

When I'm dead, I no longer care.

 

[Adverse]

When I'm dead, I no longer care.

Hi AJ . . . It's been awhile.

We got that property line thingie settled. Our neighbor accepted what we offered for free seven years earlier, only he paid a little bit for it.

BTW, I'm not going . . . so I wanna hang onto everything.

 

[army judge]

I remember that discussion, good for you.

If you're trying to preserve your assets for your heirs, placing everything into a family trust is one vehicle to consider.

Discuss it with a trusted attorney.

As far as heirlooms and keepsakes, I gave most of mine away 20 years ago.

I had enjoyed them for years and felt I'd allow my heirs to enjoy them longer by giving them away before I died.

Money is but a tool, albeit a very useful tool, if used properly.

But, I have far more than I can ever use, so I've began doling my money out, too.

Again, the right lawyer can show you how.

Talk to at least three, think about it, then slowly begin the process.

Humans have a deep seated desire to keep stuff, my wife hasn't yet broken her bond as completely as I have.

All I know is that I'll take a last breath one day, until one day comes, I'll just live the best life I can.

You'll figure it out at your pace.

While you ponder this matter, doling out a few mementos can help you make the big move.

One way to protect your assets, avoid conflict while never doing stupid stuff.

 

[Adverse]

Do you need my address, to send some of your stuff?

I understand that protecting assets from creditors and frivolous lawsuits, and setting things up to have them flow to our heirs, avoiding probate is two separate issues, and I would want to do both.

 

[army judge]

Do you need my address, to send some of your stuff?

I understand that protecting assets from creditors and frivolous lawsuits, and setting things up to have them flow to our heirs, avoiding probate is two separate issues, and I would want to do both.

If you have a trust attorney create a family trust, probate will be avoided.

I had one of my colleagues create our trusts.

Yes, I created three family trusts.

One for my cattle ranch, one for my oil, natural gas, and pipeline assets.

One for my other real estate assets.

Yes, all could have been placed into one trust, but I had reasons to partition my assets, to partition heirs who don't play well together. LOL


Each person's situation is unique, which is why you must retain a trust attorney you trust. LOL

 

[adjusterjack]

For 20 years or so I have been trying to find definitive information about how to 1.) protect personal assets from litigation, debt collectors and nursing homes, and 2.) avoid probate.

Now that you have gotten a bunch of responses I will give you the definitive answers:

protect personal assets from litigation

Don't do anything for which you can be sued.

debt collectors

Don't default on any of your debts.

nursing homes

Save up enough money to cover the cost of nursing homes or buy long term care insurance.

avoid probate.

Use beneficiary or transfer-on-death designations wherever possible. Unfortunately, FL does not yet provide for transfer-on-death (beneficiary) deeds so you might need a revocable living trust to avoid probate on your home.

 

[army judge]

Now that you have gotten a bunch of responses I will give you the definitive answers:



Don't do anything for which you can be sued.



Don't default on any of your debts.



Save up enough money to cover the cost of nursing homes or buy long term care insurance.



Use beneficiary or transfer-on-death designations wherever possible. Unfortunately, FL does not yet provide for transfer-on-death (beneficiary) deeds so you might need a revocable living trust to avoid probate on your home.

Sums it up rather well, quite succinctly, too.

 

[Adverse]

We have Beneficiary Deeds and TODs on our Missouri stuff, and in FL there is the Lady Bird Deed, also known as Enhanced Life Estate Deed.

One of the best reasons to use a Florida lady bird deed is that it can help our clients to become eligible for Medicaid, which is a government assistance program that provides healthcare coverage to those who pass The Income Test and The Asset Test. This type of deed, along with a Qualified Income Trust, can be used to qualify for Medicaid benefits and to keep assets in the family that would otherwise be taken by the Medicaid agency to repay the cost of Medicaid benefits a person may receive during their life.

Ladybird Deed

FL Asset Protection Trusts:

Trusts