Having an Asset Preservation Plan in place will help protect your life savings from the potentially devastating costs of long-term care. As you may know from some of our other videos, the key to the planning is transferring the ownership of assets into a trust that is set up so that legally those assets aren’t considered to be yours anymore.
The main concern we hear from people surrounds putting their life savings into this trust, and the question we typically get, especially from people considering this type of asset preservation planning early in their lives, is:
“What if I need some of that money back? Is it stuck there?”
In this Elder Law Minute, Wes Coulson, Southern Illinois Elder Law attorney, continues with the series on Asset Preservation Planning and dispels the main concern people have about putting their life savings into an Asset Preservation Trust.
What if I put my life savings into an Asset Preservation Trust and then I need some back later?
Transcript:
Hi, I’m Wes Coulson and this is your Elder Law Minute. This is another in our series of videos on long-term care Asset Preservation Planning.
As you may know from some of the other videos, the key to the planning is transferring ownerships of assets into a trust that is set up so that legally those assets aren’t considered to be yours anymore. So, one of the very typical concerns I get from people, especially who would be considering this planning a little bit in advance, which is the best time to do it, is “Well, what if I need some of that money back? Is it stuck there?”
And the answer is: No, that as long a the money doesn’t come out directly to you, as long as it’s distributed out to an approved beneficiary, they can return it to you.
Now, I have people say, “Yea I hear that, but I don’t want to have to go to the trustee every time I need $50 for that or $100 for this and explain why I need money.”
And, no I wouldn’t want you to do that either. And that’s why we’ve come up with what we like to call the coffee shop, waitress or waiter approach. If you will, think of the assets that are in your name as your coffee cup and the ones you’ve put in the trust as the pot of coffee. Well, if you’re at a coffee shop, you don’t have you cup filled after every sip, you wait until your cup is about halfway down and then the waitress or waiter comes and pours you some more. So, it makes it a lot easier in we just say, “Okay, when you get down to a certain agreed point, the trustee can take a larger sum of money out, no questions asked, and get it back to you.” It’s actually a pretty simple, pretty workable process.
So, if that’s your concern for not proceeding, it really shouldn’t be. Thanks.
For more information on Asset Preservation Planning, visit these articles:
- The Sooner the Look-Back Period Starts, the Sooner It Ends
- Why do I need an Asset Preservation Plan?
- Long Term Care Costs: The Biggest Threat to your Financial Future
“Your Trusted Advisor on the Elder Care Journey”
Dent-Coulson Elder Law is dedicated to providing families in the St. Louis area with their Elder Law needs. Our practice areas include Asset Preservation Planning, Veterans Benefits, Medicaid Eligibility, Alzheimer’s Planning, Special Needs Planning, Estate Planning and more. We understand the financial challenges you may face as you and your loved ones grow older. At Dent-Coulson Elder Law, our clients’ well-being is our number one priority. For immediate help, call (877)995-6876 or Contact Us and we will get in touch as soon as possible.
