Consider Setting Up a Trust If You Are in One of These Five Situations

 Posted on September 02, 2022 in Family Law Blog

Setting up an estate plan for the first time can be a daunting task. Not only does it confront you with potentially uncomfortable questions ranging from the practical to the existential, but it also requires careful accounting of your assets and detailed planning for the future. Fortunately, you are not required to manage your estate plan alone. Experienced attorneys who have no motive but to protect your wishes are available to help you identify the type of estate planning instruments that will benefit you the most. One common feature of an estate plan is a trust.

What is a Trust?

A trust is a fiduciary (financial) arrangement that allows someone to give their assets to a designated person (trustee), who will manage or hold the assets until they pass on to the trust’s recipients (beneficiaries). People who have specific plans for their money, property, or heirloom belongings after they pass away commonly use trusts to ensure their wishes are protected.

The other major benefit of a trust is that it usually avoids the probate process, which is when a deceased person’s estate gets reviewed and distributed to beneficiaries in a court proceeding. This generally allows beneficiaries to access an inheritance more quickly and with less hassle, taxes, and court costs than an estate without a trust.

When is a Trust Useful?

There are many different kinds of trusts and, therefore, many situations in which a trust can be useful. However, certain situations make a trust a practical necessity for avoiding a complex and expensive probate process. These include:

• Individuals who are over age 50, childless, and unmarried - Having a trust allows you to designate the recipients of your estate, as well as give instructions for the management of your financial affairs if you become incapacitated.
• Individuals who are high net worth - If you have a high net worth, a trust may be able to help you avoid significant estate taxes as your assets are passed on to your beneficiaries.
• Individuals with a heightened need for privacy - The probate process is part of the public record, but trusts are private affairs that can help you keep the details of your personal life out of probate court.
• Individuals with children from a previous marriage - More than one kind of trust allows you to specify which of your assets are passed on to your spouse or your children. A qualified terminal interest property trust (QTIP) allows a surviving spouse to determine how much property remains in a trust every year, maximizing estate tax savings.
• Individuals with philanthropic intentions - Charitable trusts allow you to designate how much of your money will go to charities and beneficiaries.

Contact a Lombard, IL Estate Planning Lawyer

Estate planning is best done early and often. For help creating an estate plan that is sensitive to your needs and preferences, call the experienced team of Lombard, IL estate planning attorneys with A. Traub & Associates. We will listen carefully to your situation and offer a variety of strategies that could work for you. Call 630-426-0196 today to schedule a comprehensive consultation.

Source:

https://www.fidelity.com/life-events/estate-planning/trusts

https://www.investopedia.com/terms/p/probate.asp