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Attorney Randy Ratliff

Sole Benefit Trusts

Nashville Attorney Experienced in Estate Planning Matters

Although issues like the transfer of wealth to future generations and the preservation of assets in the face of long-term medical care can be difficult to discuss, speaking with an established Nashville estate planning attorney can alleviate much worry and possibly save a considerable amount of money in the long run. While some people in Davidson and Williamson Counties only need a simple will and health care proxy, others find themselves in a more complex situation, such as one that calls for a sole benefit trust. No matter your specific needs, Randy Ratliff Law Offices, PLLC can help you evaluate your situation and advise you regarding possible solutions.

Trust documents, such as sole benefit trusts, have become more popular in recent years, both as a way of avoiding probate and as a tool used to preserve wealth during the lifetime of the person setting up (or benefiting from) the trust. In legal parlance, a “trust” is merely a fiduciary relationship in which a trustor (sometimes called a “settlor”) transfers property to a trustee for the benefit of the “beneficiary.” Depending on the particular type of trust, the same person may serve multiple roles. The trust itself is considered a legal entity – similar to a corporation in some ways.

Understanding How a Sole Benefit Trust Works

Trusts can be in the form of a first-party trust (which primarily benefits the settlor of the trust) or in the form of a third-party trust (which is established for the benefit of a third person, such as a close relative). Many third-party trusts are considered “special needs” trusts because they are established in order to transfer assets for the benefit of someone who is receiving government benefits like TennCare (or Medicaid) or Social Security Supplemental Income (SSI). Special needs trusts can allow the settlor of the trust to provide money that can be used for the beneficiary’s needs without disqualifying him or her from receiving government benefits that are based on the income of the recipient.

Sole benefit trusts are generally regarded as third-party trusts because they inure to the benefit of a beneficiary, who is usually a disabled individual. However, the grantor may also be dependent on governmental benefits that are determined based on income or assets. An example of someone who might want to consider a sole benefit trust is a grandparent who is receiving SSI and TennCare benefits but wishes to provide for a grandchild with a disability. Both the grantor (the grandparent) and the beneficiary (the grandchild) can be aided by such an arrangement. If you believe that a sole benefit trust would fit your particular situation, you should talk to an established Nashville attorney about the potential benefits of such a trust – as well as the potential drawbacks to such an arrangement. Sole benefit trusts typically contain a payback provision, through which the government may be paid back for money expended through governmental benefits like Medicaid at some point in the future. It is important to fully understand how sole benefit trusts and other estate planning tools operate so that an informed decision can be made in your particular situation.

Schedule an Appointment to Discuss Your Needs with a Nashville Attorney

The task of setting up a trust or engaging in another type of estate planning can sometimes be emotionally difficult. At Randy Ratliff Law Offices, PLLC, we work hard to make sure that each of our clients understands the options available to their family and them and how their decision will affect their own future and that of the loved ones whom they will someday leave behind. We regularly work with people throughout Davidson and Williamson Counties, including residents of Nashville, Antioch, Hermitage, Madison, Goodlettsville, Joelton, Franklin, Brentwood, and Cool Springs, to find the legal instruments and strategies that suit each client’s individual needs. For an appointment, call us now at 615-656-8282 or contact us online.