Use of trusts in estate planning

In this issue of the DiGiorgio Law Firm, PLLC Estate Planning Newsletter we highlight use of trusts in estate planning.  You do not need to be wealthy or own complicated assets to take advantage of trusts.  In fact, most of the trusts featured below are used to make the lives of everyday people simpler and less costly:

  • Minor’s Trusts: If some of your beneficiaries or contingent beneficiaries are minors you want to include a testamentary minor’s trust in your Will.  If a minor inherits property outright, a guardian will be appointed by the court to manage that property on the minor’s behalf until he or she reaches the age of majority;
  • Supplemental Needs Trusts (SNT): If a beneficiary is or is likely to become a recipient of public benefits, you may want to include an SNT as part of your estate plan.  These trusts may be stand-alone trusts created during your lifetime and or be included in your Will for that beneficiary.  Otherwise, he or she may lose their public benefits and be required to spend-down their inheritance before re-applying for benefits;
  • Spendthrift Trusts: If your estate plan includes beneficiaries you deem incapable of managing their financial affairs prudently, you may want to include a spendthrift Trust or other Asset Protection Trust for their benefit:
  • Medicaid Asset Protection Trusts (MAPT): If you are concerned that you or your spouse may need to receive health care at home or in a nursing home for an extended period of time, you may want to consider a MAPT to preserve assets for the benefit of your intended beneficiaries.
  • Revocable Living Trusts: These Trusts, if properly funded, can avoid the need to probate your Will and significantly reduce the costs of administering your estate.  If you are concerned about a Will contest, or if you own property in multiple states, you should strongly consider a Revocable Living Trust.
  • Marital Trusts: These trusts are often used as part of a comprehensive tax plan to reduce estate taxes; however, they are also frequently used for smaller estates involving second marriages in order to protect and preserve assets for both the spouse and children from a prior marriage.
  • Split Interest Trusts: Trusts for one beneficiary now and another later, such as income only trusts and Uni Trusts (trust that pay out a fixed percentage annually);
  • Other: There are many other trusts used for tax planning, charitable planning and or asset protection planning.

To learn more about steps you can take to protect assets for yourself and your loved ones call us to schedule a consultation today.