The Benefits of A trust
Estate planning entails more than simply creating a will and storing it in a drawer. It’s a continuous process of assessing your needs, keeping track of your assets, and determining what legal steps are necessary to achieve your objectives. Estate planning may make a massive difference for you and your family; the sooner you start, the better.
We are dedicated in helping Maine families plan for the future at Jackson Estate Planning. We’ve seen how a well-planned estate can help a family succeed or provide a person with special needs with the resources they need to live a dignified life. We’ve also witnessed how poor inheritance planning can split a family. We approach every estate planning issue with full dedication and energy because of the high stakes.Contact us right now!
Why Do I Need an Estate Planning Attorney in Maine?
If you are married, have children, own a property, or run a business, all of your assets could be at risk if you do not have an estate plan in place, which is why you will need the assistance of an experienced attorney to help you with your legal problems.
Our estate planning attorneys in South Portland provide a free estate planning and asset protection strategy consultation during which we will assess your needs, answer your concerns, and explore your options.
What is an Estate Planning?Estate planning is the process of preparing duties to handle a person’s assets in the event of incapacitation or death. The transfer of assets to heirs and the settlement of estate taxes are all part of the preparation. Most estate plans are created with the assistance of an estate law practitioner. Estate planning entails deciding how a person’s assets will be kept, managed, and distributed after their death. It also considers how an individual’s property and financial obligations will be managed when they become incapacitated. Houses, automobiles, stocks, artwork, life insurance, pensions, and debt are some of the assets that might make up an individual’s estate. Estate planning serves a variety of purposes, including protecting family wealth, providing for a surviving spouse and children, supporting children’s or grandchildren’s education, and leaving a charity legacy.
What is a Trust?A trust is an intangible legal entity (a better description would be “legal fiction”). You can’t see or touch a trust beyond a few pieces of paper, but it exists. Preparing and signing a “Declaration of Trust” is the first step in establishing a working trust. The trust exists once you make and sign the Declaration of Trust. However, a flesh-and-blood person must be in charge of this property; that person is known as the “trustee.” In traditional trusts, the trustee manages the property on behalf of someone else, known as the “beneficiary”. trustee is the person or company in charge of managing the trust’s assets, while “beneficiaries” are those who profit from the trust.
Advantages of Establishing a TrustWhen talking about estate planning, most people write a will to direct the distribution of their assets after they die. A trust, on the other hand, is a part of estate planning that may provide special benefits to your family, including you. Here are some advantages and benefits of including a trust in your estate planning strategy:
Probate is avoided via trusts.Unlike assets governed by your will, which must go through probate to be validated and distributed based on your desires, trust assets do not normally have to go through this process. A will goes to the public record, however, a trust arrangement remains confidential. When you create a trust during your lifetime, you just have to deal with your lawyer and trustee to put the agreement into effect. It’s important to remember that you can specify in your will that you desire to establish a trust upon your death; in this case, your estate will have to go through probate first before the trust is established. Privacy is essential if you wishes to keep your family’s financial concerns out of the spotlight. Furthermore, because trusts avoid the probate procedure, they are often a faster and easier way to distribute your assets when you pass away. You might even make a provision in your will that any assets kept outside of an existing trust at your death are transferred to the trust. When it comes to the loss of a loved one – or the transfer of one person’s assets to another – you want the transition to be as smooth and discreet as possible. Establishing a trust can help you achieve both of these.
Trusts may offer tax benefits.Trusts can be revocable or irrevocable, which means they can be changed after they’ve been established – or not. A revocable trust allows you to make modifications after you sign it, but depending on its provisions, it may or may not result in tax benefits in the future. On the other hand, an irrevocable trust is one you can’t amend once it’s been signed. An irrevocable trust may provide transfer tax savings since assets have been removed from your estate. During your lifetime, contributions to the trust are normally subject to gift tax obligations. Assets placed in this sort of trust (and the appreciation on those assets over time) are, nevertheless, exempt from estate tax if certain conditions are met. In addition to the initial investment, you can make an annual exclusion donation to an irrevocable trust every year without incurring further gift tax. Individuals can currently deduct up to $15,000 in gift taxes, while married couples filing jointly can deduct up to $30,000. Consult our attorney and trust administrator to see if a revocable or irrevocable trust might be a viable estate planning choice for you and your family.
Trusts create strict guidelines for how your assets are used.Whether you form a trust through your will or a separate trust agreement within your lifetime, trusts allow you to personalize your estate plan truly. You might specify limitations like age requirements or restrictions about how the assets would be utilized. For example, you could specify that the money in a trust be delivered to your grandchildren once they reach the age of 18, and that it only be used for college tuition. If a beneficiary needs extra help managing money, you might choose to limit how much money they can take from the trust each year.
Not only at death, but also during illness or disability, revocable trusts might be beneficialWills take effect only when a person dies, but a revocable trust put up during your lifetime can benefit your family once you become ill or otherwise unable to handle your assets. If this occurs, your trustee can issue distributions, pay expenses, or even file tax returns on your behalf. You can determine who will administer the assets (through the trust) ahead of time. Though no one wants to consider these possibilities, making these provisions can protect your family from having to make judgments without understanding your preferences in the event of a crisis.
Trusts provide you more options.If you form a revocable trust, you can renegotiate the terms of a trust agreement anytime by signing a document modification. This makes you adaptable and flexible to shifting conditions in life. Perhaps you will become active in a philanthropic cause that you are enthusiastic about in the future. Maybe you have a newborn grandchild you’d like to include in the trust. If that’s the case, you can name them as potential beneficiaries in your trust. Since life is unpredictable, a revocable trust allows you to adjust your estate arrangements as needed. In conclusion, when you establish a trust, you’re laying the groundwork for someone to look after the people you care about when you’re no longer able to help them. A trust helps you leave a lasting financial legacy while also simplifying the asset distribution process.
Disadvantages of Forming a TrustA trust may take longer and cost more to establish than a will. This is due to the fact that trusts are typically more intricate than simple wills. In many cases, a trust could save money in the long run. When comparing the costs of a will and a trust, consider whether your estate has to go through probate and how much that will cost. You could find that the cost of setting up a trust to avoid probate is well worth it.
Is it Possible to Contest a Trust?A trust, like a will, can be contested. The contest could succeed if the trust maker was mentally incapacitated, compelled, excessively persuaded, or tricked when setting up the trust.
Can a Trust Take Precedence over a Will?In some cases, a trust can take precedence over a will. If you transfer your diamond ring to your living trust, for example, the trust, not you, becomes the owner of the ring. So, if you leave the ring to your granddaughter in your will but name your niece to inherit it through your trust, your niece will inherit the jewelry.
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You should now understand how trust can provide a number of advantages. Finally, the best selection is based on your circumstances and the benefits you expect from the trust.
If you’re thinking about establishing a trust, you should seek the advice of an attorney who specializes in estate planning. The tax and legal implications can be complicated and should not be overlooked. You can acquire a clear image of your best course of action in the long term by reviewing your alternatives with our expert estate planning attorneys.Contact us immediately to learn more about the services we can offer.