In conjunction with a will, a trust is one of the most valuable estate planning tools that we have. Trusts aren’t only for the rich and famous. They are great devices for many people who want to protect their assets, minimize tax burdens, and ensure a bright future for family members. Trusts have the added benefit of allowing you to place conditions on how and when the contents will be divided and whom they will benefit. Special needs trusts may also be necessary to protect assets for future care of family members when they are entitled to particular government benefits.
Adding a Trust to Your Estate Plan
Generally, a trust contains a portion of your total assets and is one important piece of your estate plan. Trusts are versatile at any stage of life, especially if you have dependents or minor children who are not entitled to inherit assets until they reach the majority age. A trust could be set up for each child or grandchild and nieces and nephews, or you could create a collective pot trust to provide for the expected needs of a group of siblings.
In addition to increasing the value of your estate by reducing possible tax obligations, a trust can effectively prevent potential conflicts when the estate is settled. This can keep your family from engaging in a lengthy probate process. Another exciting opportunity presented by trusts is the ability to pay for college and medical care. To minimize tax obligations, an unlimited amount can be paid directly to the educational institution or health care facility.
Types of Trusts and What They Do
Today, many specialized trusts are available. Some are created when the estate is settled while others are separate irrevocable entities that hold assets during your lifetime. They may even contain proceeds from retirement plans, insurance policies, and investments. Almost any type of asset can be transferred to a trust. Later in life, trusts can help protect your assets in assisting to provide for cost of care.
In tandem with a will, trusts are a valuable part of a comprehensive estate plan. These two items simplify the process by outlining everything. Establishing a living trust or a testamentary trust is a wonderful way to provide for family members and to create a plan that makes you feel good. As an estate planning attorney, I can assist with the creation, management and administration of a trust that best accomplishes your goals.
If you think that a trust might be a valuable addition to your estate plan, I’ll be glad to discuss your situation, answer questions, and guide you through the process. Feel free to contact my office anytime to arrange a meeting.