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A MIDGET trust is a Medicaid Intentionally Defective Grantor Trust. Done "right", an irrevoccable trust will either pay taxes as its own independently existing entity, or the income taxes will be due and paid by the beneficiaries. A Grantor Trust is one which is created to provide benefits to someone else (the beneficiary), but the income from the trust is taxed to the person establishing the trust (the grantor). For a long time, that was a bad thing, because people put assets into a trust to benefit others often, and getting stuck with the tax bill wasn't a good thing. More recently, estate planning attorneys such as those at the American Academy of Estate Planning Attorneys realized that an Intentionally Defective Grantor Trust (i.e. a trust which is intentionally deemed a Grantor Trust by the IRS) could serve estate planning goals. Such an IDGET (or IDGT) lets the Grantor preserve the assets they put into trust for someone by having the Grantor pay the taxes instead of their beneficiary or the trust for their beneficiary. This also serves to decrease the size of the Grantor's remaining estate which can be subject to onerous Federal Estate Tax and other death taxes later. Finally, the Medicaid portion of this term (In California, the 'M' is for Medi-Cal) refers to the use of this trust vehicle to encompass assets the Grantor places into the trust to protect them from a claim by the state Medicaid authorities for reimbursement for Medicaid (often Nursing Home/Long Term Care) benefits, or to increase the Grantor's eligibility for such benefits. Any member of the American Academy of Estate Planning Lawyers should be able to assist you with such an issue. My practice is in Pittsburgh as The Estate Planning Centers at The Coulter Law Offices LLC. Please remember that this is a general discussion only, and is not intended as legal advice upon which anyone should rely. Moreover, I'm typing this reply off of the top of my head as a courtesy, not as a researched answer to your situation. You should consult with a lawyer or appropriate professional regarding you own specific facts and circumstances.
What else can I help you with?
Can the grantor sell assets listed in irrevocable living trust?
The grantor has no control over the assets in an irrevocable trust. Those assets are under the control of the trustee.
Can a Registered Representative be a trustee of a irrevocable trust?
yes
What is an irrevocable life insurance trust?
A life insurance trust is an irrevocable, non-amendable trust which is both the owner and beneficiary of one or more life insurance policies. Upon the death of the insured, the trustee invests the insurance proceeds and administers the trust for one or more beneficiaries. (Moved from discussion comments below)
Can the property listed in the irrevocable trust be sold?
Yes, property held in an irrevocable trust can be sold, but the process typically requires the approval of the trustee and adherence to the terms of the trust document. The proceeds from the sale would then be managed according to the trust's stipulations. It's essential to consult with a legal or financial advisor to ensure compliance with all relevant laws and trust provisions.
Can a trustee sell assets in a irrevocable trust when the decease owns 99 percent of the property named in the trust?
You must review the terms of the trust to determine the powers of the trustee. If you still have questions then you need to consult an attorney who specializes in trust law.On one point you seem to be confused. A decedent cannot be the owner of 99% of the property in a trust. The property is owned by the trust. The most common purpose of a trust is to remove property out of a person's estate (the grantor) so that the property bypasses probate.Once a person transfers her property to a trust, it is managed by a trustee according to the terms of the trust. A properly drafted trust has provisions that direct the distribution of property after the death of the grantor.
How can you tell if a trust is irrevocable?
Generally, an irrevocable trust is titled 'irrevocable' or is designated as such somewhere in the first few paragraphs.
What is the difference between credit shelter trust and irrevocable trust?
What is the difference between credit shelter trust and irrevocable trust?
If timber is sold on land in irrevocable trust should it go into the irrevocable trust account?
no
Can a testamentary trust be revocable?
No. A testamentary trust is irrevocable. The maker is deceased and cannot revoke it.No. A testamentary trust is irrevocable. The maker is deceased and cannot revoke it.No. A testamentary trust is irrevocable. The maker is deceased and cannot revoke it.No. A testamentary trust is irrevocable. The maker is deceased and cannot revoke it.
Is property held in an irrevocable trust protected in bankruptcy?
Can you protect your assets from bankruptcy by placing them in an irrevocable trust?
Is there a settlor in an irrevocable trust?
if a settlor of an irrevocable trust feels that he was not properly informed by his attorney of all the restrictions what can he do
Is a blind trust the same as an irrevocable trust?
No, a blind trust and an irrevocable trust are not the same. A blind trust is a specific type of trust where the trustee manages the assets without the beneficiary's knowledge of the holdings or transactions, often used to avoid conflicts of interest. An irrevocable trust, on the other hand, is a trust that cannot be altered or revoked by the grantor once established, meaning that the assets are permanently transferred out of the grantor's control. While a blind trust can be irrevocable, not all irrevocable trusts are blind.
Where can I get more information for an irrevocable trust?
You can get information on what a irrevocable trust is at the following sites I found for you to have a look at www.dummies.com/.../revocable-versus-irrevocable-trusts.htm ,en.wikipedia.org/wiki/Trust_law
Where is the form for the irrevocable trust Is the living trust the same as an irrevocable trust?
The biggest difference between the trusts is that the Living Trust is revocable and can be changed over time. For detailed information visit: http://www.ultratrust.com/revocable-trusts-vs-irrevocable-trusts.html
What does it mean that you cannot get the assets back in a revocable trust?
You CAN get the assets back in a revocable trust. You CANNOT get the assets back in an irrevocable trust. An irrevocable trust cannot be terminated by the settler once it has been created. The settler transfers their assets into the trust and no longer has any rights of ownership in that property or the trust. The main reasons for setting up an irrevocable trust are estate planning and tax purposes. Generally, assets in an irrevocable trust are shielded from creditors.
If the grantor and the trustee are the same person in an irrevocable trust can they revoke any or part of that trust from the beneficuary?
In short no, an Irrevocable Trust cant be legally revoked by either party.
Is it possible to arrange an irrevocable trust with the same person as grantor trustee and beneficiary?
You cannot have the same person as grantor, trustee and beneficiary in any trust. There is no trust created in such a set up. The grantor in an irrevocable trust cannot be the trustee. The property in an irrevocable trust must be permanently separated from the grantor's control.
