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Controlled Asset Management

Who Needs a Trust?

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! Trusts provide more privacy and a higher level of control than wills. They make it easy to direct funds to the people and causes you care about, plan for minor children and contingencies, and to designate a trustee to care for you and manage your assets in case of emergency.

For Georgia Residents

What Type of Trust Do I Need?

Still not certain that a trust is for you? Let’s dive a bit deeper…

Living Trusts

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 beneficiaries by your trustee.

Testamentary Trusts

This trust is inside your will and allows for flexibility such as only setting up the trust if it is is needed for minors. While the will still has to go through probate, such a trust can protect assets being inherited by minor children until they are old enough to manage them.

Marital Trusts

This trust leverages the unlimited marital deduction for federal estate taxes, which helps ensure your surviving spouse keeps all marital assets. Only after both have passed are any estate taxes assessed. When the surviving spouse dies, the trust passes to their heirs.

Minor Trusts

This trust allows your trustee to hold assets until your minor child has reached the age of majority or age you specify. The trustee will be able to use trust funds to support the child and they are required follow your specified fund disbursement directives when doing so.

Spendthrift Trusts

This type of trust allows a trustee to decide how the trust funds will be spent for the benefit of the beneficiary. Advantages are that creditors of the beneficiary cannot touch the funds, and it can help inheritances inside the family if the event of beneficiary’s divorce.

Charitable Trusts

These types of trusts are beneficial in that you can leave a charitable legacy and also benefit from tax deductions. You can set up your own charitable foundation or give to a donor-advised fund. If done properly, your family and community alike can greatly benefit.

Credit Shelter Trusts

Here, a married couple can reduce estate taxes by leaving the estate of the passed spouse in a trust that allows the surviving spouse to use the income, but not have complete control of the assets. Upon passing, trust assets go to beneficiaries and are not counted for estate taxes.

Insurance Trusts

This irrevocable trust is set up with a life insurance policy as an asset. The 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.

Property Trusts

This more restrictive marital trust allows the surviving spouse to use the income of the trust only and if allowed. They can have the greater of $5K or 5% of trust assets each year. This type of trust is useful in 2nd marriages where assets are being preserved for children.

Planning Matters

Why Should I Start Planning Now?

If you are an individual who values planning, control, and privacy, Siedentopf Law can help you with the creation or management of your trust. Even if you already have a trust in place, you should consider creating a Pour Over Will that designates child guardians and covers anything that may have inadvertently been left out of the trust.

Estate Planning

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Choosing a Will or Trust

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