Tuesday, February 16, 2010

Question relating to estate and your options

justalibragirl said...


I have questions about irrevocable trusts and special needs trusts. This is regarding a settlement from a lawsuit against my son's school district. It's a long story but there was a lump sum for relocation/damages awarded to me. My attorney says that she "thinks" I have to have it in an irrevocable trust. She has suggested that I put her in charge of it, but I don't know enough about any of this to make a decision. All I can find is that I can't have a family member as the trustee. Some pertinent background info: I am a single mother on permanent disability, I receive SSDI and Medicare. I also receive SSI and a low income subsidy on my Medicare through Medi-Cal. My son was just approved for federal SSI for his disability. I contacted Social Security. They said my benefits are not "needs based" and as such are not affected by the settlement. The only thing that may be affected is the low-income subsidy and SSI. However my son's benefits can be affected by the settlement because it counts as income for me. I have concerns about some of the decisions my attorney has made in our case and do not feel entirely comfortable having her in charge of the settlement. I need to know what my options are. Thank you.

1 comment:

Tax & Business Consultant said...

Dear Reader, thank you for posting your question over at our blog.

In order for us to give you our recommendations, we need more information. However, as the owner of the funds, you have several options. First, you need to understand about estates and how they work, here is a definition of IRREVOCABLE TRUST
"A trust which cannot be changed or canceled once it is set up without the consent of the beneficiary. contributions cannot be taken out of the trust by the grantor. Irrevocable trusts offer tax advantages that revocable trusts don't, for example by enabling a person to give money and assets away even before he/she dies"

Now you need to understand what a TRUSTEE is. Here is the definition
The Trustee of an "Irrevocable Trust" has sole discretion over Trust assets. You must be very careful in deciding the Trustee.

Who can be a Trustee
The Trustee can be your lawyer, your accountant, best friend, or anyone you trust who's not a relative by blood or marriage.

We hope this information is helpful. Please make an informed decision and pick a person whom YOU TRUST.

Good luck,
Web Tax Office