Once you’ve physically or mentally passed to the next realm, you will leave some situation for family. Complicated interactions, probate and extra taxes may be the gift you leave. Or you may set up a trust.
A trust can greatly simplify things. There are many types used for various situations. The most common is a revocable living trust. It lets you:
- specify how your estate will be distributed
- can avoid probate – a lengthy, costly & emotional process
- minimize arguments
Joint property ownership, or payable-on-death transfers or accounts can also avoid probate. Be careful about the taxation consequences of these.
The cost will vary depending on your situation, but $1,500 to $3,000 may cover the basics of:
- your trust
- a will
- medical directive and
- a power of attorney
List out for assigning all of your assets to the trust that you wish to avoid probate. Include wording for any additional assets so they may ‘pour over’ into the trust.
Retirement accounts and insurance policies generally aren’t subject to probate.
While alive, you have control to change, or even revoke it. Revocable trusts don’t require a tax return. This type of trust is part of your estate & won’t offer much tax benefit or asset protection. An irrevocable trust can, but once set up is difficult to alter.
After passing:
Further benefits are clarity and control. You may detail how your assets are distributed to beneficiaries and avoid much family conflict. For younger ones, a trust can outline ages and conditions they receive what part of their inheritance.
Anibal Group LLC RealtyNetWorth.com 