Benefits of Creating a Trust
Trusts are important legal documents that people include in their estate plans to transfer assets efficiently to their loved ones. The creator of the trust places assets or property into a trust, and designates a third-party to manage or distribute these assets according to your wishes.
Some of the benefits of adding a trust to your estate plan can include:
- Avoid the hassle of probate
- Control or eliminate tax liability
- Protect the privacy of your beneficiaries
- Protect your heirs from lawsuits, creditors, and other legal concerns
- Specify contingencies or special circumstances for asset distribution
- Plan for incapacitation or medical emergencies
- Charitable gifting
There are a variety of trusts you can include in your estate plan, and we are here to discuss your unique circumstances to determine which ones you need to protect your wealth and legacy.
Different Types of Trusts
Revocable Living Trusts
Over the last 4 or 5 decades, the revocable living trust has become the standard for basic estate planning. The revocable living trust has largely replaced the last will and testament for those seeking to control what happens to their assets after death.
There are many reasons people choose revocable living trusts instead of wills:
- Control of Assets During Life: The ability to easily control assets if someone becomes incapacitated. While a will only controls things after death, a revocable living trust can control and protect assets during life.
- Avoid Probate: One of the greatest advantages of using a revocable living trust is avoiding probate. Unlike wills, the revocable living trusts are not automatically filed with courts. With a revocable living trust, the administration of a person’s estate remains a private affair with only the interested people knowing is happening.
Now, a disgruntled family member might try to drag a trust into court, but this is the rare exception. Sometimes a family has to go to great lengths to plan to thwart a litigious and determined family member. If a family has a problem member, there are methods in addition to a revocable living trust that can help discourage or prevent their interference.
Similar to a revocable trust, an irrevocable trust is also used to transfer money and property out of the trustmaker’s name and into the name of the trust. However, with an irrevocable trust, the trustmaker cannot alter, change, or cancel the trust after it has been established.
Accounts and property owned by an irrevocable trust have extra protections from creditors and lawsuits. Irrevocable trusts can also reduce personal tax liability because the accounts and property owned by the irrevocable trust are not part of the estate.
Life Insurance Trusts
With this type of trust, clients can feel confident that their loved ones will receive your life insurance benefits without incurring high estate taxes. Life insurance trusts also let you decide how your beneficiaries can use the money from your policy after you pass away. These trusts also ensure your loved ones can obtain your insurance benefits without the hassle of paying costly estate taxes.
Call (608) 344-5491 Today to Speak a Trust Lawyer
If you are worried about transferring assets to your loved ones or how much your estate will be taxed if your estate passes through probate, then you need to consult with Krause Estate Planning & Elder Law Center to discuss all of your options with a knowledgeable and experienced attorney.
He's been attentive to my detailed requests, and always takes the time to explain my options and answer any questions I have about them.Justin
Prepared my trust in a most professional manner.Ronald S.
Attorney Krause explained everything clearly and concisely.Ciambrone
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