Trusts can be critical tools to help protect your loved ones. You don’t need to be rich to take advantage of the protections offered by Trusts! In this issue of the DiGiorgio Law Firm, PLLC Estate Planning Newsletter we highlight some uses of Trusts for everyday people.
- Minor’s Trusts: If some of your primary or contingent beneficiaries are either minors or otherwise too young to handle money, your estate plan should include a trust for those beneficiaries. In the absence of a trust, the Court may require the appointment of a guardian to handle any money passing to a minor.
- Special Needs Trusts: If you have a beneficiary with special needs, who may need to apply for public benefits at some point, you should consider setting up a “Special or Supplemental Needs Trust” for that beneficiary in order to avoid forcing them to spend down their inheritance to qualify for public benefits. Another version of these trusts can be used for people already on public benefits, who are about to come into money for a variety of reasons.
- Marital Trusts: If you want to provide for your spouse, but also want to protect the interests of children from a prior marriage, a Marital Trust will allow you to achieve both objectives.
- Spendthrift Trusts: If you have a beneficiary who has difficulty managing money, has creditor problems, is in a marriage that may end in divorce, or is susceptible to undue influence by people that may take advantage of them, a Spendthrift Trust will help to protect their inheritance.
- Medicaid Asset Protection Trusts: If you are concerned that your assets or the assets of a loved one, may be consumed by the costs of long-term care, a Medicaid Asset Protection Trust can help. Warning: For these trusts to work best, you need to plan in advance!
- Pet Trust: If you have a fury friend you would like to see taken care of after you are gone, a pet trust can help.
- Charitable Remainder Trusts: If you are interested in benefiting a charity upon your death or the death of a loved one, a charitable trust is a good option. These trusts allow the lifetime beneficiary (including the Trust’s creator) to receive an annuity or unitrust (annual payout of a % of Trust assets) interest. Upon the death of the beneficiary the Trust then pays out the remainder to charity. These trusts are particularly helpful in deferring or eliminating capital gains on the sale of highly appreciated assets.
- Revocable Trusts: These trusts allow the creator to achieve the following objectives without giving up control of the assets: reduce the time and cost required to administer your estate; avoid probate in multiple jurisdictions if you own out of state property; reduce the risk of Will contests; hedge against incapacity; avoid the public scrutiny of your estate that may occur when your Will is probated.