Selecting a Trust for an Estate Plan
When developing an estate plan, one of the tools that an estate planning attorney will consider is a trust. A trust is a separate legal entity that can be created to hold assets for another person. Trusts are often used as a way to transfer an inheritance to children and other family members.
There are many reasons why someone would consider a trust for an estate plan, as opposed to a will. A person may wish to avoid the probate process, which can be a long and expensive process that creates a public record of everything the person owned. A person may also prefer not to give a child an inheritance all at once, and a trust can be used to transfer an inheritance over time. A person with young children may prefer to ensure that the child does not receive the inheritance until they become an adult or meet some other condition, such as graduating from college. Trusts give a person much more control and privacy than a will, and trusts provide many more options than a will.
An estate planning attorney will have many types of trusts to consider when developing an estate plan. A common type of trust is the revocable living trust. This type of trust allows a person flexibility in changing, controlling, and even revoking the trust, if circumstances change. When the person passes away, the named successor manages the trust and distributes the assets according to the instructions that were provided.
For married couples who want to avoid estate and inheritance taxes, bypass trusts are an option. These types of trusts can also be appropriate for couples who have children from a previous marriage, as these trusts can be used to provide for a surviving spouse and designated children from the previous marriage. For couples who want to provide more options to a surviving spouse, a disclaimer trust may be appropriate. For families with children who cannot manage money appropriately or who may be disabled, a supplemental or special needs trust may be appropriate for the benefit of that child.
There are many other types of trusts that an estate planning attorney will consider when developing an estate plan. Which type of trust would be appropriate for your estate plan? Find out today by scheduling a free consultation with our estate planning attorney, Aaron J. Trukositz.