Estate planning strategy should be reviewed periodically. It should be based upon prevailing laws that might impact retirement and tax planning. A well-developed estate plan is sure to help accomplish several vital goals. It makes Asset management easy and effortless allowing you to pass on your business smoothly. In case you have not done this before, then take help of a qualified estate planning lawyer to prepare a will along with other crucial legal documents.
Difference between Living Trust and Will
Will is something that everyone will need, but not a trust. The latter offers greater control and flexibility on how and when assets as well as property should be distributed. The main reason to consider revocable Living Trust is it helps prevent probate. It is the process supervised by the court to prove deceased person’s Will validity. Thus, your named trustee(s) will be able to distribute your property and assets to your heirs quickly. It is vital if there are dependent heirs.
Is Trust the right solution for you?
Trusts are of different types with each having its own pros and cons. Your experienced estate planning lawyer can educate you on this topic and help set it up. All trusts tend to fall into two categories, namely, irrevocable and revocable. It is not possible to dissolve or change irrevocable trust while revocable trust permits retaining control of assets mentioned in the trust.
What can you achieve with Trust?
1. Maintain confidentiality and privacy:
Probate is considered to be a public record. This means your Business interests, private financial information and Will is part of public record. This is when the estate is sent for probate. But Trust promotes confidentiality and privacy. This is rather meant for those involved like beneficiaries and trustees.
2. Avoid Probate:
Probate process might take several months or even a year to complete and also expensive. Court and lawyer fees might be 5% of total estate value. But with Trust, your limited liability company and estate can be settled quickly and without having to spend a fortune.
3. Minor children or Adult with special needs:
Such people are taken care of by special needs trust especially their personal needs and healthcare. Also is maintained Medicare benefits eligibility.
4. Safeguards beneficiaries:
Beneficiary protection is derived from trust from divorce, creditors or lawsuits. Irrevocable trust when established ensures that claimant or credited cannot lay any claim against the trust held assets. Also guidelines are set by the trust considering timing of distributions.
5. Optimize flexibility:
The Trust enables you to dictate the terms, place restrictions concerning asset management, thus protecting your Business interests. Instead of a beneficiary, an independent trustee can be appointed to carry out smart decisions. Moreover, how asset is to be used can be restricted. The Trust, for instance, can stipulate that assets could be used for meeting beneficiary’s lifestyle requirements. It includes medical bills, car or home purchase. However, the beneficiary might not derive direct distribution.
6. Boost family values:
The Trust can prove to be a powerful tool that can help pass down essential family values. It can be related to home ownership, education, religious beliefs, community service, land conservation, Asset management, etc.
7. Preserve family wealth:
Remarriage and divorce result in assets leaving the family. But with a Trust, estate will be preserved for the next generations.
8. Reduce family conflict:
Challenging the Trust be it related to family property or limited liability company, can be expensive and difficult unlike a Will. This is because the Trust clearly specifies your wishes on what you wish to pass onto your heirs and beneficiaries. Also is stipulated what, how much and when to be distributed among them. Thus, there is no room for misunderstanding.
Consult the experts
If you plan to set up a Living Trust or already have one in place, do consult your financial, tax and legal advisors. They will ensure prevailing federal and state tax laws are met and everything is in proper place.
