BLOODLINE TRUSTS TO KEEP ASSETS IN YOUR BLOODLINE

When Sharon was planning for how her assets would pass to her four children, she envisioned an easy transition. She had read all the articles on avoiding probate, setting up trusts, and organizing her affairs. She had even spoken to her children about her wishes (a very difficult thing to do). All of her children had wonderful relationships with each other and the assets were to be divided equally. After Sharon died, the transition was easy; each of her children received an equal share of assets and everyone was happy. Unfortunately, shortly thereafter the real trouble began.

Her number 1 son was a doctor. He had a good practice and he thought his patients were happy. One was not, and sued him above his malpractice insurance levels, and WON! Suddenly all of this son's assets, including Sharon's legacy, were gone.

Daughter number 2 was married with 3 children of her own. She thought she would follow her mother's estate plan when she died, since things had progressed so smoothly. Suddenly her husband filed for divorce, and demanded half of all assets, including Sharon's. After a terrible legal battle (which cost thousands in legal fees), most of Sharon's money was gone.

Daughter number 3 was ill most of her life, but had a terrific husband who cared for her, along with a faithful nurse and two children. When she died, she left everything to her loving husband, who promptly married the nurse. He added her name to all the assets. When he later died, everything was left to the nurse. Daughter number 3's children got nothing.

Son number 4 was single, and had never had much money. After receiving Sharon's inheritance, he felt rich and proceeded to buy all the thing in life he had never been able to afford. Before too long, all the money was spent and he was no better off.

What happened? This was not what Sharon had planned so carefully for. She missed one critical step: protecting her money even after she was gone. But how? With a BLOODLINE TRUST! This starts out like a simple Living Trust while Sharon is alive. She has full access to and control of the funds. Upon her death, the assets avoid probate, but instead of distributing outright to her four children, the assets are divided into four separate trust shares to be held for each of her children for life. Each child can have access to his or her share for everyday living expenses, but does not receive the lump sum in one chunk. The share held in trust is protected from the lawsuits, divorce, death or crazy spending of the children. Yet the money is there if needed. Plus, when each child dies, his or her remaining share is left to his or her children, Sharon's grandchildren, whom she adored and wanted to benefit if she could.

This simple, but often overlooked, planning tool would have been the answer to Sharon's prayers, and could be perfect for you too. See an attorney who focuses on Estate Planning and Probate Avoidance to establish a Bloodline Trust.

Make sure you protect your special needs child!

You're taking care of your disabled child and hopefully, you?re doing okay. But what will happen when you're gone? If you plan ahead, you should be able to make sure your child is protected. Is it enough to leave an inheritance for your child? No, not if you want to protect your child after you?re gone. There are two big problems with leaving money or property to an adult child with disabilities.

First, can the child manage the inheritance? If the disability is mental or emotional, that could be a major problem. If the disability is physical, managing money could still be a problem, particularly if the child is not mobile!

Second, is the inheritance enough to provide for all of the child's needs for life? If not, leaving money outright to a disabled child may be a bad idea. Here's why: if your disabled child has money, he or she cannot obtain any public benefits, such as Medicaid, SSI or food stamps. The child will have to spend the inheritance until it's gone. Once the inheritance has been used up, then the child may receive those public benefits. But public benefits don't cover a lot of comforts of life. They are very basic. For example, they may pay for a nursing home, but not for other housing options. They may pay for basic food needs, but not for transportation, telephone, or cable.

How can we protect a disabled child? For many people, the answer is a special needs trust. With this trust, you can leave an inheritance for a child and place someone you trust in charge of managing the money. Perhaps the money should be managed by another one of your children, or by another trusted family member, or even a trusted friend. If there?s no one, you could name a professional manager, such as a bank trustee.

Any other benefits to a special needs trust? Yes. A Special Needs Trust can be used to preserve a child's eligibility for public benefits. So even though you've left an inheritance, the child can still get Medicaid, SSI and food stamps.

And since public benefits only provide very basic support, the trust funds can be used to supplement the public benefits, providing more of the comforts of life. It's a wonderful way to protect a disabled child.

Is a special needs trust just the same as a regular living trust? No. A regular trust will not protect a disabled child adequately. A Special Needs Trust is a very specialized trust that must satisfy a number of legal requirements for it to work. Where do we get a special needs trust? A Special Needs Trust is only part of the planning that may be needed to protect a child with a disability. To get help, you should seek the services of a lawyer experienced in dealing with the needs of people with special needs.

Make sure you have prepared for the day you'll no longer be able to care for your disabled child.