Trusts

Avon Trust Attorneys

A Law Firm You Can Trust With Your Trusts!

There are many reasons a person may choose to create a trust. From avoiding the probate process to making it easier for you to ensure your children are financially cared for after you are gone, trusts can fill many roles when estate planning.

We will go over some of the more common uses for a trust and how you can implement them to make life for your family members easier.

What is a Trust?

A trust is a legal entity with separate and distinct rights similar to your own. Trusts can be established to provide legal security for you, your assets, and your beneficiaries.

The person who creates a trust is known as the trustor. The person or people who manage the trust and distribute its assets are known as trustees. People who receive assets from the trust are known as beneficiaries. When creating a trust, you can assign a person to act as both the trustee and a beneficiary of the trust.

Your trust is a tool used to determine how the assets within the trust are managed and distributed. Trusts are invaluable to people when planning their estate and how it will be managed after they pass away, especially for individuals and couples with minor children. They can give parents peace of mind, knowing that their assets will be used to care for their children should the unspeakable happen.

What Kinds of Trusts Are There?

There are many types of trust you can use when estate planning. Each one serves a specific purpose, giving you a wide range of options for your particular situation.

Revocable Trust

A revocable trust, also known as a living trust, allows you to control your assets during your lifetime. You can modify it or revoke the trust if your situation changes. If properly implemented, this trust will actually avoid the probate process, resulting in a smooth transfer of your estate to your beneficiaries.

Irrevocable Trust

As the name implies, an irrevocable trust can not be revoked once it is established and typically cannot be changed. This type of trust offers strong protection against creditors, has the added benefit of minimizing estate taxes, and can be used to protect assets from being spent on long-term care expenses. You should speak with an estate planning lawyer before creating an irrevocable trust, as they are complex and irreversible.

Special Needs Trust

A special needs trust is designed for individuals with disabilities. You can use this trust to transfer your assets to a beneficiary without jeopardizing their eligibility for government-sponsored benefits such as Social Security and medical benefits. There are strict laws a special needs trust must follow in order to be valid.

Charitable Trust

This is a philanthropic option available if you wish to leave a portion of your estate to a charity or cause. A charitable trust can give you access to tax benefits, but there are strict requirements you must follow to remain in compliance.

How Do Trusts Affect Probate?

Probate is a legal process families might go through after they lose a loved one. Assets that are only in the deceased’s name and without a named beneficiary must go through probate. The court will then make sure that the assets are divided and distributed to the decedent’s family as outlined in their will. If there isn’t a will, the court will follow the law of “intestate succession.”  In this case, assets will flow to the deceased’s next of kin.

Properly implemented trusts avoid probate. Once you outline how your trust is managed, transfer your assets to the trust, and designate how the assets will be distributed, your assets will generally side-step probate, making it easier for your beneficiaries to claim assets designated to them.

However, there are many legal pitfalls that can hinder your intended outcome and result in probate anyway. A skilled estate planning lawyer can help make sure you are covered, your assets are secured, and your family will be able to properly mourn their loss instead of worrying about the legal process.

Do You Need a Trust?

A properly created and funded trust can resolve many of the potential problems with the distribution of assets.

As with most things in life, the answer to this question is – “It depends.” The most commonly used trust is referred to as a “revocable living trust.” In order to analyze whether you need a trust, an estate planning attorney should ask you several important questions. You can get acquainted with a few of the questions you will be asked below:

  • Do you want your minor children to potentially receive their inheritance when they turn eighteen years of age?
  • Would you like to control the flow of money to your heirs instead of them receiving the funds in a lump sum all at once?
  • Is it one of your highest priorities to avoid probate?
  • Do you have a blended family?
  • Is there a potential that a creditor may seek to seize your assets or the assets inherited by your heirs?
  • Do you have a charitable intention that you would like to see implemented when you pass away?
  • Are you seeking to avoid federal estate taxes?
  • Are you seeking to protect your assets from being used to pay for long-term care?
  • Are any of your beneficiaries receiving government assistance?

A properly created and funded trust can resolve many of the potential problems with the distribution of assets.

There are many types of trusts and reasons why you may want to consider one, so receiving guidance from an attorney is crucial.

Please contact the Hallett Legal Group, LLC to see if a Trust is the right estate planning tool for your family.

Call Today: 440-530-9166