When it comes to estate planning many people create wills to make sure that their assets are distributed after they pass away. But there is another aspect of estate planning that may offer more of a unique advantage to you and your family: a trust.
A trust is a legal contract, drafted by an attorney, with a named trustee, a trustee can ensure that your assets are managed according to your wishes both during your lifetime and after your death.
Here are the benefits of adding a trust to your estate planning portfolio.
Trusts Avoid The Probate Process
While assets that are controlled by your will have to go through probate in order to be verified and distributed according to your wishes, trusts assets usually do not have to. A will become public records while your trust will remain private. When you decide to establish a trust during your lifetime, you only need to converse with your attorney and trustee to execute the agreement. It is also good to know that there is a way to stipulate in your will that you want a trust upon your death. Your estate will go through a probate prior to the trust being established.
Privacy is important if you want to keep you and your family's financial matters out of the public eye. Plus, avoiding the probate period trusts are often a faster and simpler way. When you are dealing with the death of a loved one or the transfer of assets from one person to another you likely want the changes to be as seamless and private as possible.
Tax Benefits
Trusts can either be revocable or irrevocable, meaning that they can be amended after being created or not. A revocable trust gives you the option to make changes to it after it is signed. The terms of the trust play a role in it either way it may lead to advantages down the line.
An irrevocable trust does not allow you to make changes after the agreement has been signed. This is due to the fact that you have already transferred assets out of your estate. Contributions to the trust that are generally subject to gift tax requirements during your lifetime. However, if certain conditions are met assets in these types of trusts are sheltered from estate tax upon death.
In addition you are allowed to make an annual exclusion gift to an irrevocable trust each year without having to pay additional gift tax on that contribution. The current gift tax exemption rate is up to $15,000 for individuals or $30,000 per married couple. Make sure that you consult with your legal attorney on what trust plan and options suit you and your family best.
Specific Parameters
Whether you establish a trust under your will or create a separate one during your lifetime. They offer the ability to customize your estate plan. You can include conditions such as age provisions attainments on how the asset will be used. For example, you can state that your money goes to your grandkids only once they turn 18 and to only be used for college tuition.
Help During Illness
Wills only take place once a person passes away. However revocable trust established during the lifetime can help your family if you become sick and are unable to manage your assets. Although no one likes to think of these scenarios it is important to be prepared and safeguard your family from having to make decisions without knowing your wishes during the difficult times.
Contact Attorney Bucklin Today!
If you or your family is looking to protect your assets with estate planning you should seek legal advice. If you have any specific questions or concerns regarding your will, trust, or even where to begin on your estate planning, reach out to Attorney Bucklin at 781-632-8675 or by filling out a contact form!