CREATE AND MAINTAIN YOUR WILLS & TRUSTS
When you hear the term “trust” in estate planning, you may think it’s meant only for the wealthy. However, it’s actually a valuable tool that can be used by everyone! Still not certain that a trust is for you? Let’s dive a bit deeper…
A standard will becomes public record once filed with the probate court, whereas trusts provide privacy and a higher level of control. With a trust, a legal arrangement is made where a party is designated to hold property on behalf of another. Trusts are not required to go through the probate process, so you may easily direct funds to the people and causes you care about, take care of minor children, plan for contingencies, and even allow a trustee to care for you and manage your assets in case of emergency.
Your Siedentopf Law Atlanta Estate Planning Attorney is here to make sure you know and understand your best options.
What Type of Trust is Right for You?
Living trusts (revocable or irrevocable)
This is a general category of trusts which you create and fund during your lifetime, as opposed to a testamentary trust which is inside your will. Living trusts avoid probate, and after your passing, your assets will be transferred to your designated beneficiaries by the trustee you have chosen. Particular types of living trusts have special benefits as noted below, but all living trusts make the management and transfer of assets easier, quicker, and more private than probate.
This trust is inside your will and allows for flexibility such as only setting up the trust if it is needed because there are minor children. The will still has to go through probate, but one considerable advantage of such a trust is to protect assets being inherited by minor children until they are old enough to manage the assets.
This trust takes advantage of the unlimited marital deduction for federal estate taxes, which helps ensure your surviving spouse keeps all the marital assets during their lifetime. Only after both spouses have passed away are any estate taxes assessed against the estate. When the surviving spouse dies, the trust passes to their designated heirs.
Trusts for minors
This trust allows you to designate a trustee to hold and handle assets until your minor child has reached the age of majority or reached whatever age you specify in the trust. The trustee will be able to use trust funds to support the child. They are required to follow any directions you give about how those funds should be disbursed.
This type of trust allows a trustee to decide how the trust funds will be spent for the benefit of the beneficiary. This type of trust has the advantage that creditors of the beneficiary cannot touch the funds. It can also keep inheritances inside the family if the beneficiary is going through a divorce.
These types of trusts are beneficial in that you can leave a charitable legacy and also benefit from tax deductions. There are many ways to go about this, from setting up your own charitable foundation to giving to a donor-advised fund, but if done properly, the benefit for your family and for your community can be great.
Credit shelter trusts
This trust allows a married couple to reduce estate taxes by leaving the estate of the first spouse to die in a trust which allows the surviving spouse to use the income, but not have complete control of the assets. After the second spouse passes, the assets in trust will go to the designated beneficiaries and not be counted in the estate of the second spouse for estate tax purposes.
This trust is an irrevocable trust set up with a life insurance policy as an asset. The life insurance policy will not be counted as part of the taxable estate and is well protected from creditors. However, very specific rules for maintaining the trust and the insurance policy must be adhered to.
Qualified terminable interest property trusts
This trust is more restrictive than a marital trust, which typically allows the surviving spouse free access to the trust assets. In this case, the surviving spouse will be able to use the income of the trust only, and, if specifically allowed, he or she can have the greater of $5,000 or 5% of the trust assets each year. This trust is particularly useful in second marriages where assets are being preserved for children.
Not Sure Which One Works for You?
Contact The Atlanta Trust Attorney of Siedentopf Law
If you are an individual who values planning, control, and privacy, Siedentopf Law can help you with the creation or management of your trust.