There are many different avenues available to help you accomplish your estate planning goals. One of the most commonly used tools is a trust. In essence, a trust is a legal document that manages one's assets up to and after one's death. This form of estate planning is popular because it provides a lot of flexibility and privacy. As such, you should seriously consider using a trust when planning with an estate lawyer. Learn more about the types of trusts available to suit your needs.
An irrevocable trust is one that cannot be rescinded or altered unless certain conditions are met. In most cases, people choose these trusts to protect their assets from claims against the estate. In addition, one might choose this type of trust to help reduce the amount owed for taxes. There are many different reasons why an irrevocable trust may be the right fit for you.
There are some basic things to know about the workings of irrevocable trusts. The creator of the trust is referred to as the grantor. An irrevocable trust also has a trustee who manages the assets held in trust. In addition, the grantor will name certain beneficiaries to receive the assets upon his or her death.
Irrevocable trusts have a few key benefits. These trusts can be set up to avoid federal or state transfer taxes, as with a QTIP trust. They can also be arranged as charitable trusts or life insurance trusts. Regardless of the type of trust, each of these instruments is governed by Utah Code (75-7). Irrevocable trusts can be beneficial, but they can also have a lot of consequences. It is important to discuss the possibilities with an estate attorney before proceeding.
Trusts can also be revocable in nature. Revocable trusts can be changed or revoked during the grantor's lifetime. This is because the grantor retains the authority to transfer property in and out of the trust. This type of trust does more than just offer the ultimate in flexibility. It also helps avoid probate since the assets are distributed according to the terms of the trust. One important thing to remember is that the assets in a revocable trust may still be subject to creditor claims. Yet, these “living trusts” are a popular vehicle for managing assets up until the trustmaker's death.
Another common trust is known as the Totten Trust. These trusts are created through a financial institution. Essentially, the trustmaker deposits a sum of money with a bank and acts as the trustee of the account. Upon the grantor's death, the funds pass to the named beneficiary. This is another popular way of avoiding the lengthy probate process. Many refer to this type of trust as a “Payable on Death” account.
All in all, there are many different considerations when creating an estate plan. In addition to the trusts discussed above, there are many other options available. It is crucial that you work with a qualified estate lawyer to ensure that your assets are distributed as planned. It is never too early to start on the estate planning process.
If you need a probate attorney or an estate attorney, contact the law office of TR Spencer today.