One of the misconceptions that many people harbor about estate planning is the notion that you lose control of assets that you convey into any type of trust. This is definitely not the case when it comes the most commonly utilized trust, which is the revocable living trust.
If you create a trust, you are called the grantor of the device. The trustee is the person or entity that serves as the trust administrator, and the beneficiaries can receive distributions from the trust. As the grantor of a living trust, you would be able to serve as the trustee and the beneficiary while you are alive and well.
This would give you total control over the trust while it is intact. Plus, since it would be a revocable trust, you would have the power of revocation if you ever choose to go that route for one reason or another.
The original trust terms are not set in stone after you originally establish the trust, and this is another flexible aspect. If you decide that you would like to convey property into the trust after it has been established, this is relatively easily accomplished.
You can also add or remove beneficiaries as you see fit. You would name a successor trustee in the original trust declaration to administer the trust after you are gone, and you can change this as well.
There are essentially three different ways that you can modify a revocable living trust.
You could prepare and sign a trust amendment that would go along with the original trust to change one or more of the provisions. It is possible to add multiple amendments over the years, but this can potentially confuse the successor trustee.
A trust restatement is a single document that could be used to make significant changes to the original trust. It can be a rewrite of the initial document with some parts changed, or it can be a separate attachment. If you have added a number of amendments, you could use a restatement to supersede them for efficiency purposes.
The other option would be to completely revoke the trust and take back direct personal possession of the property. You could then create a brand-new trust that is structured in any way that you choose. It could be another revocable living trust, but there may be a reason for you to create a different type of trust.
One of them would be for Medi-Cal planning purposes. This is a vast subject in and of itself, but briefly, many people seek eligibility because Medi-Cal will pay for long-term care. Medicare will not pay for a stay in a nursing home, and these facilities are very expensive.
Since Medi-Cal is a need-based program, you cannot qualify if you have assets to speak of in your own name. Resources that have been conveyed into a revocable living trust that is revocable would be counted, but a Medi-Cal trust would be irrevocable.
You could convey assets into an irrevocable income only Medi-Cal trust to create a financial profile that would lead toward eligibility. Until and unless you accept Medi-Cal benefits, you could continue to receive income that is earned by assets in the trust.
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