When meeting with your attorney, and discussing your situation, assets, and wishes your attorney will be able to decide which trust is most beneficial for you.
There are several options with it comes to trusts, and this is just a quick comparison of four that are commonly used in Elder Law.
Medicaid Asset Protection Trust (MAPT)– An individual or couple can set up a MAPT to protect all of their assets if planned in advance, by putting them in irrevocable trusts. This trust is set up when the client is near or has passed retirement age; while they are in good health, and sound of mind.
Medicaid Family Protection Trust (MFPT)– This trust is similar to the MAPT, but it also offers more significant asset protection. MFPT protects the assets of the grantor, as well as the beneficiaries of the estate. This trust is a good option for younger retirees who want to protect themselves and their family in the event of an unforeseen scenario.
Veterans Asset Protection Trust (VAPT)– Is an intentionally defective grantor trust or a trust that is used as an estate-planning tool to freeze certain assets for an individual for estate-tax purposes, but not for income-tax purposes. A VAPT trust should be considered if a client is a wartime veteran, or the surviving spouse of a wartime veteran, who is looking into long-term planning. The VAPT meets the requirements from the VA of a complete gift or complete relinquishment.
Parental Protection Trust (PPT)– This is a trust that Elder Law council will recommend when the traditional irrevocable trust plan is no longer an option. PPT allows the children, of the client, to donate funds to a trust for the benefit of their parent or parents. The funds or assets are put into a trust and are preserved until the time of the parent’s death. At that time, the assets and or funds in the trust revert back to the children.
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