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ESTATE PLANNING:
TRUSTS
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A trust is a fiduciary agreement that allows a “trustee” to hold assets on behalf of your beneficiaries. A few benefits of setting up a trust are:
• Trusts usually avoid probate whereas a will passes through probate court
• A trust, compared to a will, gives you more flexibility to distribute your assets
• Trusts can also help minimize gift and estate taxes
While there are many different trusts, a major distinction between them is whether they are revocable or irrevocable. The trust you choose to establish depends on your individual situation and should be discussed with a lawyer skilled in this area of estate planning.
Revocable Trusts
A revocable trust, also known as a living trust, can be modified during your lifetime and can help assets pass outside of probate. This trust, however, is usually subject to estate taxes. A revocable trust is great tool for those that may want to change their estate plans. In our opinion, it is a necessity for parents with younger kids or children who are not yet able to deal with a lifestyle change that would result from receiving a lump sum inheritance.
Irrevocable Trusts
An irrevocable trust is typically exempt from the estate tax by removing the trust assets from your estate. By transferring your assets out of your estate, they are also out of the reach of probate. However, once you establish the trust, you lose control over the assets and the ability to change terms of the trust.
Special Needs Trusts
Do you have a loved one with a disability that has left them unable to provide for themselves?
If you want to leave money or other assets to a loved one with a disability, then you must plan carefully. If you do not, you may jeopardize your loved one’s ability to receive government benefits such as Medicaid or Supplemental Security Income (SSI). Our estate planning attorneys can properly draft a special needs trust, or supplemental needs trust, that will allow your loved one to receive government benefits while still receiving funds from the trust.
We handle special needs trusts by finding a solution to fit your specific situation. For example,
• Create a trust for a family member with the need to provide for special needs beneficiaries in a particular way
• Create a trust from inheritance money
• Create a special needs trust from a personal injury settlement after an accident has left an individual incapacitated
We enjoy working with our clients through the entire process of establishing special needs trusts and can partner with your other trusted advisors to ensure all areas have been considered.
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