In estate planning, there is a common myth that a single “magic” trust can maximize every possible tax deduction while simultaneously providing total asset protection from long-term care costs. We believe in giving our clients clarity over dynamic legal theories. The reality is simple: asset protection planning and income tax optimization are often competing goals.
To get the legal protection you want, you frequently have to give up certain tax flexibilities, and vice versa. Understanding this reality shifts the conversation from “How do we get every benefit?” to the far more empowering question: “Which objective matters most to our family right now?”
Here is how we help you evaluate these tradeoffs:
Lifetime Irrevocable Trusts (MAPTs): Moving assets into an Irrevocable Medicaid Asset Protection Trust starts the 5-year look-back clock for nursing home coverage, but it requires giving up direct legal control over those assets today.
The Marital Asset Shelter Trust (MAST): For married couples who want complete flexibility, a MAST strategy keeps your revocable trust flexible during your lifetime. It then creates asset protection over inherited assets for the surviving spouse after the first spouse passes away – all without triggering a 5-year look-back period.
Protecting the Next Generation (BDOTs): When leaving inheritances to adult children, using a Beneficiary Deemed Owner Trust allows them to enjoy the property while surrounding it with “four walls” of protection against divorces, lawsuits, and creditors.
There is no such thing as the single “best” trust in the abstract. There is only the plan that best aligns with your values, your family, and your vision for the future. Let’s sit down and discuss the choices that make the most sense for you. Contact us to learn more about how we can help.
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