Trust and Estate Planning

Importance of Trust & Estate Planning

Effective estate and gift planning facilitates the orderly transfer of assets to your children, provides security for your surviving spouse, and can reduce or eliminate the tax due on the transfer of your business and other assets. For business owners, providing for business continuity and succession of ownership is essential. We can guide you through the complex process of getting your financial affairs in order.

Benefits of a Trust

  • Bypassing probate court, leading to quicker asset distribution to beneficiaries
  • Enhanced privacy
  • Asset protection
  • Reduced or eliminated estate and gift taxes
  • The ability to better control future wealth by setting conditions for asset distribution

When considering trusts, it's vital to evaluate your specific needs and objectives before selecting a suitable type. In the subsequent section, we'll delve into a comprehensive exploration of various trust types.

What is the Purpose of a Trust?

There are numerous purposes for an Estate Planning Trust, which includes:

  • Precise asset handling as per your plans
  • Managing estate tax implications
  • Wealth protection while qualifying for Medicaid in your later years
  • Financial care for young children or dependents with disabilities

Who Should Have a Trust?

Trusts aren’t the best solution for everyone. A trust may be beneficial for those in specific situations, such as:

  • Having over half a million in assets
  • Maintaining asset privacy
  • Streamlining post-passing probate for loved ones
  • Establishing inheritance stipulations for children

Types of Trusts

Living Trust

A living trust is created during your lifetime and it designates a trustee who will manage assets for your beneficiary or beneficiaries after your passing.

Revocable Living Trusts

A revocable living trust is created during your lifetime and can be altered or revoked while you’re alive. It is used to avoid probate, but while you’re alive, it’s not an ironclad technique for asset protection. Any assets in your revocable living trust will still be available to creditors during your lifetime, although it will be more difficult for them to gain access.

Irrevocable Trusts

An irrevocable trust means you cannot change or alter anything in the trust once it’s established. You have legally removed any rights to ownership to anything you put in the trust. In some cases, an irrevocable trust may be used as a way to protect assets from creditors or bypass estate tax, as you will have effectively removed yourself as owner for any of the assets inside the trust. Irrevocable trusts can be beneficial for those in professions that are vulnerable to lawsuits, such as attorneys or doctors.

Joint Trusts

A joint trust is a trust established for two people, like husband and wife. While both parties are alive, they maintain total control over any and all assets that are in the trust. They can change the trust at any time, and after one partner passes, the surviving partner becomes trustee.

Testamentary Trusts

A testamentary trust is a trust that’s created within a will, and it only goes into effect upon your passing. Because the trust isn’t truly created until after you pass, it’s not considered a living trust. It’s important to note that this option results in the will going through probate. And, there’s also diminished privacy protection that some trusts offer, as the trust terms are described in the will.

Inclusions for Your Trust

You have the option to place all of your valuable assets into the trust, including:

  • Real Estate
  • Retirement Accounts
  • Brokerage Accounts and Non-Retirement Investments
  • Bank Accounts
  • Business Interests
  • Non-Qualified Annuities