When my husband I decided to start a business, we didn't think about the legal aspects of doing so. We didn't realize that purchasing business insurance, getting building permits and making investments all required some type of legal advice. But after speaking to a close friend, who also happens to own a small business, we contacted a business attorney. Now, we have the legal smarts to make the best decisions for our business, as well as the legal representation in case something happens to our company. I hope that you find my blog helpful and informative for your own business. It's a great resource for finding the legal advice, resources and guidance you need to get your company up and running.
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Irrevocable Trusts And Heirs With Autism: Why It's A Good Thing To Conisder
Ronnie Mills
Do you have a child with high-functioning autism or a similar processing disorder who is able to function without a legal guardian but still has difficulty understanding how to manage money? If so, you have every reason to worry about what could happen when you die -- especially if you plan on leaving the majority of your estate to that child.
Learn more about how an irrevocable trust can help protect your heir or heirs from both themselves and those who might try to take advantage of them financially once you're not there to protect them.
What Is an Irrevocable Trust?
There are two basic types of trusts (with many sub-variations): revocable and irrevocable ones. A revocable trust is a legal entity that holds all of your wealth or assets for you -- but you can alter it, cancel it, or generally do whatever you want with it. If it is passed to your heir that way after your death, then he or she would also have the same ability. An irrevocable one is different -- if you choose to create one for yourself, you cede control of your assets to the trustee -- the person named to control the assets, protect them, invest them, and disburse them as needed.
It's often possible to set up a revocable trust that converts to an irrevocable trust when you die.
What Are the Benefits of an Irrevocable Trust?
The exact benefits can vary a little from situation to situation, but here are some general things that they can do that will keep your heir financially secure:
- The trustee is in charge of how the funds are disbursed and you can set the terms saying how any assets are released. That means your autistic heir can't be pressured by "friends" into loans or expensive gifts.
- The assets in the trust are largely protected against lawsuits from over debts. The trust is considered a separate entity from your heir -- so if he or she makes a big mistake with credit cards or a loan, the trust can't be taken away.
- Your life insurance benefits can go directly into the trust -- in many cases, that allows your heir to avoid paying taxes on the inheritance money.
- The trust does not have to go through probate. Not only does that avoid the cost of probate and prevent the state from taking any of the assets you intend to help your heir through life, it keeps the details of the trust private -- which could avoid family conflicts.
- An irrevocable trust, when done properly, won't stop your heir from receiving any needs-based disability benefits, like Supplemental Security Income (SSI) and Medicaid health coverage.
Having a child with a cognitive disability means that you have to plan ahead -- you know that your child can be manipulated more easily than the average individual. You also know that he or she may not be very good at long-range planning. An irrevocable trust can help you continue to look after your child's best interests long after you're gone -- making sure that the money you leave behind will continue to provide for him or her for years to come.
For more information on estate planning surrounding an heir with special needs, talk to an attorney today. Visit a site like http://www.lynnjackson.com for more help.
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