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Trusts and Estate Planning

There are many misconceptions around what trusts are and who they are designed to benefit. A person doesn’t need to have heaps of money and properties in order to create a trust and begin estate planning. In fact, even though estate planning is for everyone, far too many people neglect to ever do so and ultimately leave their family to pick up the pieces after they’re gone. Continue to read along to learn more about how these processes work, who’s involved, and what the benefits are.

What Does It All Mean?

The concept of a trust is actually quite simple. Trusts are legally binding arrangements in which one party holds property on behalf of another. An estate refers to everything a person owns, including their vehicles, properties, life insurance, personal possessions and any other assets they may have. Therefore estate planning is the proactive process of distributing ones wealth before they pass away or become incapacitated.

Who Does It Involve?

These arrangements are most typically made within families in order to grant another person the authority to manage the estate described in the trust. The person creating the trust is called the settlor or trustor, and the recipient is referred to as the trustee. Lawyers are typically involved in this process as well as to ensure every detail is properly addressed and legally stands.

What Are the Advantages and Disadvantages?

There are far many more advantages to curating a trust and beginning the estate planning process than there are disadvantages. Mainly, it allows many of the legal processes to move more quickly. Additionally, a trust is effective immediately, can offer tax minimization perks, and allows for underage beneficiaries. The noteworthy disadvantages of trusts are the preparation costs and the amount of time it can take to retitle your assets.

Conclusion

Everyone needs a will and trust. Without one, your loved ones are at the mercy of the Government who will run up your estate charges with no concern over taxes. Contact us today to receive a free consultation on your trust and estate planning needs!

Why Should You Start a Trust?

While death isn’t fun to think about, it is still important to plan for those around you after you pass on. Starting a living trust is a great idea to protect your assets and property. A common debate is whether you should start a will or a trust. Today, we are going to discuss the benefits of starting a trust rather than a will.

 

Two Types of Trusts

First, there are two kinds of trusts. A revocable trust (also called a living trust) allows your assets to avoid probate after you pass, while allowing you control over these assets while you are alive. This trust offers flexibility, so you have the option to get rid of it at any time. It is not set in stone.

An irrevocable trust is more permanent and doesn’t allow you access to your assets while you are alive. It cannot be dissolved or altered until after you die. However, this makes your assets able to pass by probate and reduce the amount of estate taxes. Also, if your trust assets generate income, you are not subject to tax liability.Trust Fund

 

The Benefits of a Trust

Now that you know about the two types of trusts, let’s look at the benefits of having a trust. Trusts allow you to specify each and every term, so you can limit what distributions may be made and to whom. If you have a revocable trust, you still have access to your assets during your lifetime, so you have control in that aspect, too. Then, the remaining assets will be distributed accordingly after you pass on.

Trusts help your assets and estate avoid probate, meaning that it can be directly distributed after you pass without any taxes, fees or the hindrance from the court. Probate is public record, so a trust allows your assets to stay private. In addition, trusts protect your wealth and estate from creditors or beneficiaries who are not good at managing money or assets.

Revocable trusts allow you to name your family members or other trusted individuals to have authority over your assets if you somehow become unable to manage your estate – wills do not let you do this.

Conclusion

It is important to have either a trust or a will because without them, your property will be distributed according to the state laws that remain out of your control. However, a lot of people find that a trust works better for them and their specific situation. Your age, wealth, and marital status help determine whether or not you need a trust.

If you need help planning a trust, or if you are trying to figure out if a trust is right for you, contact us at Family Law Richard E. Young & Associates!