Do You Need A Trust?
Explaining The Broad Categories Of Trusts
Many of our clients have initial misconceptions about trusts. The truth is that trusts can be an incredibly powerful, yet flexible edition to estates of all sizes. Trusts may work hand in hand with your last will and testament. Your will may typically reference your trusts, and it may also include a pour-over provision where you direct that any unaccounted assets will be transferred into the trust principal.
Trusts can be set up for different purposes within two broad categories: revocable and irrevocable. A living revocable trust can be modified at any time, as its name suggests. Any assets transferred into an irrevocable trust, in contrast, will no longer be under your control or considered part of your estate. Yet both offer the benefit of probate avoidance.
Helping You With Your Trust Planning
With a living revocable trust, you can name yourself as both the trustee and the beneficiary. During your lifetime, you may freely transfer or withdraw assets from the trust principal, and even abolish the trust. Upon your passing, however, the trust becomes irrevocable and control passes to your named successor trustee. He or she will distribute the assets in the trust principal according to the instructions you included in the trust document. Best of all, the successor trustee will be able to make those asset transfers without going through probate.
Exploring Irrevocable Trust Options
For clients interested in reducing the value of their estate or shielding assets from creditors, we might recommend an irrevocable trust. This trust cannot be revoked, as are any asset transfers you make to the trust. Consequently, this decision requires careful planning.
Exploring The Diversity Of Trusts
We have the experience to find the trust that will fit your specific situation. We have helped clients set up life insurance trusts that purchase a policy to cover the estate taxes, spendthrift trusts to shield assets from creditors and living revocable trusts. A trust might also be a good idea for parents who want a contingency plan for their minor children. In that instance, we might also recommend the additional estate planning instruments of a medical power of attorney, a statutory durable power of attorney and a declaration of guardianship.