Written By: Brandy Miller | February 2, 2017 | No Comments
We want to thank the Veterans in Reading and Berks County for their service. We also understand that Veterans’ service too often results in considerable sacrifice to themselves and their families. Sacrifices include serious medical conditions which can affect their employment for years or even a lifetime.
Why Veterans Asset Protection Trusts (VAPTs) Are So Important
The Department of Veteran Affairs (VA) offers useful programs and benefits for Veterans. Unfortunately, many of these benefits are dependent on medical costs as well as income. Trusts can provide a way Veterans can protect their assets, grow their wealth, and still retain their benefits.
What Are VAPTs?
VAPTs are irrevocable Trusts. VAPTs allow eligible Veterans and their surviving spouses to protect their assets and to enjoy several benefits including:
- VA Benefits. VAPTs shield Veterans’ from being counted when determining eligibility for VA benefits.
- Better quality of life and care. By preserving VA benefits for Veterans and their spouses, VAPTs ensure Veterans get medical care when they need it and therefore able to enjoy a better quality of life.
- Tax benefits. VAPTs offer tax advantages because they prevent assets from being counted as resources.
Ensuring VAPTs Offer Protection
You must draft VAPTs carefully, or they will be ineffective. Here are some key points to consider when creating a well-written VAPT.
- The claimant cannot maintain control of the property.
- The grantor of the Trust should not
- have the right to receive income from the Trust. If the grantor is taxed on income from the Trust or has the right to withdraw income from the Trust, the VA may continue to count the Trust as an asset and a resource; and
- be taxed on income from the Trust.
- VAPTs must name a lifetime beneficiary who can receive distributions from the principal during the lifetime of the grantor. The lifetime beneficiary must not be the grantor or someone living in the grantor’s household.
There are many other considerations when setting up a well-drafted and effective VAPT. Again, not creating a VAPT according to current best practices can mean the VA continues to regard the property in a Veterans Asset Protection Trust as assets. When the VA considers Trust property as assets, tax benefits disappear, and Veteran’s benefits are reduced or cut off.
You Won’t Better VAPT Attorneys in Reading and Berks County
Setting up a Veterans Asset Protection Trust can be complicated. You need an Attorney who knows what they’re doing. We do. And we will help you create an effective VAPT that’s compliant with current best practices. That’s because we
- take the protection of Veterans seriously;
- understand current VA practices and guidelines;
- have 40 years’ experience in Estate Planning and Trusts in Berks County around Reading;
- take as much time as necessary to fully understand your assets and how you want them distributed;
- ask questions only an experienced Estate Planning Attorney knows to ask;
- explain complicated Estate Planning and Trusts legal issues using plain English;
- develop a plan that protects your assets and wishes; and
- very importantly, dedicate ourselves to planning your estate the same as we would for members of our family.
Contact Us Online or Call Us today at 610-670-9000.
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