Should I Set Up a Trust?
As experienced Estate Planning attorneys, we will work with you to ensure your estate plan includes each of the features that is right for your situation. This may include Wills, Trusts, Healthcare Powers of Attorney, Durable Powers of Attorney, Tax Planning, and Social Security Planning. Most of these are fairly straightforward for our clients to understand, however, the one that is often misunderstood is Trusts. Trusts are different from a will and offer several additional benefits for you and those that will be receiving your assets.
Trusts are a way of controlling the division of your assets after your death based on your terms. The assets can be set to distribute only after certain conditions are met. Examples of these conditions are when a spouse passes away, when children or grandchildren reach a certain age, whether or not a beneficiary attended college, or simply distributions of a set amount over time. This can help protect your assets from being wasted or ill spent. With regards to assets in a will, all are divided and distributed upon the death of the testator. This process can also be drawn out based on the actions of the probate court and the final determinations.
Trusts are activated when they are signed by the grantor and not upon death like a will. This can lead to tax and other financial benefits as the assets are often moved before death which can reduce estate taxes, positively impact Medicaid and Social Security eligibility, and provide a vehicle for charitable giving to reduce income tax. Another benefit of setting up a trust is that the terms are kept private and not made public as a will's terms are with time.
To ensure that your trust is set up properly and your wishes are followed, it is recommended to consult with your estate planning attorney and have them draft up the paperwork and file it. There are also several important parts of your estate planning that are not covered by a trust. Some of these non-asset related items are guardianship of minor children, possession of pets, and certain parts of business succession plans. Powers of attorney are another factor that can affect the transfer of your assets. Contact our estate planning attorneys at Foley, Shannon, Powers, and Rusch to schedule an appointment today and relieve the stress of preparing your estate plan.