How Trusts Can Protect Your Home and Reduce Estate Taxes

Trusts can play a major role in protecting assets, avoiding probate, and reducing estate taxes, but the details of how they are drafted and funded can determine whether the plan works.Todd Lutsky and Susan Powers discuss how homestead protection applies when a home is owned by a trust, why avoiding probate can also help protect assets from creditor claims, and how irrevocable Medicaid trusts may help families protect assets from long-term care costs while maintaining important flexibility. They also explain how family limited partnerships and LLCs can be used to reduce estate taxes through valuation discounts, why those strategies must have a legitimate non-tax purpose, how Medicaid liens on a home can be handled after death, and why personal care contracts are important when a family member is being paid to provide care.