I’m an asset protection attorney – here’s why you should NEVER leave money to your kids

An estate protection lawyer has revealed the six things she would never do when it comes to estate planning – and the one thing you should do to protect your heirs.

Brittany Cohen, based in California, has more than 126,000 followers on TikTok, where she shares informative videos about money management, wills and trusts.

She recently went viral after explaining how parents could save their kids from money troubles by setting up a living trust and making them trustees.

“I would never leave anything to my children when I die,” she said. “Instead, I would leave everything to a trust where my children are named as beneficiaries.”

“I would never leave anything to my children when I die,” she said. “Instead, I would leave everything to a trust where my children are named as beneficiaries”

A living trust, or a revocable trust, is one statutory regulation that came about during your life in which you, the grantor, designate a trustee to protect your assets and arrange their distribution in the event of your death or disability.

Unlike a will, a trust bypasses inheritance lawa lengthy and expensive process supervised by the court to distribute your assets after your death.

For similar reasons, Cohen said she would never name her minor children as beneficiaries of her life insurance accounts.

In California, where she is licensed, minor children are not allowed to receive an inheritance until they are 18 years old.

A court-appointed conservator would be appointed to manage the money until the child reaches the age of 18, but this can be avoided by placing your life insurance accounts in a living trust and naming your minor children as beneficiaries.

“I would never add my kids’ names to my house to get around the Medicaid reinstatement,” she continued. “Instead, I would place my home in a Medicaid asset protection fund and name my children the beneficiaries of that trust.

A Medicaid asset protection trust is irrevocable trust designed to prevent your assets from being counted towards Medicaid eligibility in long-term care.

Cohen also insisted she never add her children’s names to her bank accounts or to her primary residence deed in an effort to avoid probate court.

Unlike a will, a trust bypasses probate, a lengthy and expensive process overseen by the court to distribute your assets after your death

For similar reasons, Cohen said she would never name her minor children as beneficiaries of her life insurance bills because many states don’t allow them to receive an inheritance until they reach age 18.

“If at some point in your life you add your child’s name to your property, the first thing that could happen is a property tax reassessment,” she explained in a statement. previous clip. “If your property has increased in value … you may have to pay more property taxes.”

The second reason is that it eliminates the option of step-up in base, a provision that adjusts the cost basis of an inherited asset at fair market value on the date of death of the deceased.

“You will have caused them to pay more capital gains tax than they would have had to if they inherited that property at your death,” she said.

Cohen emphasized that the main reason for creating a living trust for your heirs is to avoid probate.

She explained at the end of her video that she would never let her children go through probate court and “spend” unnecessary time, energy and money going to court to own the assets I want them to inherit.”

“Trusts are also for the middle class,” she added in the caption of her video, which has received more than 1.2 million views and nearly 2,000 comments.

The main takeaway was that people should set up a trust for their loved ones.

Instead of trying to get around the Medicaid recovery by adding her children’s names to her home, she would place her home in a Medicaid asset protection fund.

Cohen also insisted that she would never add her children’s names to her bank accounts or to her primary residence deed in an attempt to evade probate court.

Cohen said the top reasons for avoiding having your children’s names listed on your primary residence deed are potential property tax increases and a missed opportunity to minimize capital gains taxes.

“Summary: Get Confidence lol,” one person wrote.

“So what you’re saying is setting up a revocable living trust,” another joked.

‘Trust a trust [checkmark emoji]’ added someone else.

A number of people have been concerned about how much it would cost to set up a living trust, but she believes anyone who owns property or assets should consider owning one.

“One of the most common misconceptions is that you need a lot of money to set up a trust for a trust to be worth it, and that’s just not true,” she said in another video.

“The reality is that setting up a trust generally benefits someone else. So the question to ask yourself is, “What experience do I want the people I love to go through in order to take ownership of the assets I want to transfer to them?”

“If you don’t really care what that experience is like for your loved ones then maybe a trust isn’t for you,” she added. “But the reality is that estate planning is for the people you love the most and there is no magic number that makes it worth it for them.

‘It’s about whether you want them to go to court or whether you want it all very clear [easily] for them to take ownership.’