We’re all looking to save taxes, court costs, legal fees and ‘make it simple’ for our heirs. A last will and testament is the cornerstone of all estate planning, maybe with a trust.
Whether you are trying to protect your assets from possible creditors, prevent young heirs from spending their inheritance or minimize estate taxes, there is likely a trust for you.
A qualified terminable interest property (QTIP) trust allows an individual, called the grantor, to leave assets for a surviving spouse and determine how the trust’s assets are split up after the surviving spouse dies.
Providing for future generations shouldn’t be (overly) taxing. To manage taxes as you pass down your assets, look into UTMAs, 529s, child IRAs and trusts.
In presentations regarding essential actions individuals should take regarding inheritance, emphasis is usually placed on drafting a will. This leaves unanswered what happens to assets that do not pass by will —so called non-probate assets.
While it’s never fun or pleasant to think about what will happen to them if the worst should happen to us, it’s very important to consider how we can ensure that they are well cared-for when and if we are no longer able to care for them ourselves.
In general, the best reason to establish a charitable trust, is if you would like to create a long-standing form of charitable giving.
Tax obligations continue on despite the passing of a loved one, and in some cases, come about because of it. Tax deadlines pose a challenge for grieving families.
For larger estates, a revocable trust is generally the most effective tool for avoiding probate. It involves some setup costs. However, it allows you to manage the disposition of all of your wealth in one document, while retaining control and reserving the right to modify your plan.
Trust funds are not just for the ultra-rich. These sophisticated estate-planning tools can make just as much sense for middle-class Americans who own a home and have a net worth of at least $100,000.