LA Probate Law and Trusts You Should Know About
One of the best ways to pass your assets on to your children is to put them into a trust, or trust fund. A trust is a legal entity that holds assets and money on behalf of another person or persons. An individual, or more than one, can be put in charge of the assets in the trust, and they are responsible to disperse the assets according to the written plan created by the person that created the trust, the grantor. It is not difficult to establish a trust, and one can be created at any time – even from a Will. The primary benefit of a trust is that assets put into one are exempt from estate taxes because they do not go through the probate process. The grantor chooses a trustee, should nominate a successor trustee just in case of death or becoming incapacitated, and details how the money or assets are to be used. When creating a trust, you should know that there are many details that need to be considered to ensure that it is going to work the way you want it to. By contacting Scott Schomer at LA Probate Law, you can get professional advice on the best way to achieve this once you provide your estate planning goals. This way, a trust type can be recommended that will fit your needs best, and the details built into the creation of it that will best carry out your needs.
This is the most popular type of trust and it can be rather easily created. Its benefits are that it allows the grantor the power to control his or her assets totally and enjoy them as long as possible. In a living trust, the grantor, trustee, and the beneficiary are often the same person until death. A successor trustee is appointed by the grantor when the trust is created. The negative side of a living trust is that all assets controlled by it will be subject to taxes, and they may or may not be able to escape estate taxes. Many people create a living trust, but fail to actually put items into it. Once in the trust, however, other benefits are included. In order to find out if a living trust will benefit you and your particular situation, you should consult with Scott Schomer, the attorney at LA Probate Law about your estate planning needs to see if a living trust is in your best interests.
Another kind of trust enables you to pass your assets directly to your grandchildren. This is called a Generation-Skipping Trust, or a Dynasty Trust. The necessity for this kind of trust is that if the assets were given directly to your children, then they would be subject to a large amount of taxes at a rate of about 45 percent! This type of trust works best when there are a lot of assets involved. The trust is set up so that the children will benefit from the assets while they are alive, but it is the grand-children that will actually become the heirs. The primary goal of this type of trust is to protect the wealth for as long as possible, and even if the child has financial troubles or is irresponsible, the assets cannot be accessed. If you need to learn more about Generation-Skipping Trusts and how to protect your wealth for the long term in the best possible way, be sure to consult with the LA Probate Law office, who is an experienced estate planner. This type of trust is not only for the wealthy.
Life Insurance Trusts
An excellent way to create a trust and an inheritance is by using life insurance to fund it. When you die, the life insurance policy is placed into a trust that was previously created for that purpose. This enables the proceeds from the life insurance policy to escape probate and the taxes that go with it. It also enables your heirs almost instant access to the money, which may be used to cover funeral expenses and to pay for medical bills. This type of trust is referred as an Irrevocable Life Insurance Trust, or ILIT. In order for the IRS to recognize this type of trust, however, there are several things that must be put in place first. For one thing, the trust must be created at least three years before you die, and then it has to have the money for the premiums put into it. The cost for the life insurance is to be paid for with this money. If you are interested in creating an ILIT, you need to seek the advice of an attorney at LA Probate Law, who can guide you in the process, and also provide you with guidance on all your estate planning needs.
You have enjoyed your pet for a number of years and recognize that there is the possibility that he or she will need to be cared for – if you should die first. Creating a trust for your pet is an excellent way to ensure that there is plenty of money available to meet the needs. You will need to name a trustee for the trust, and then provide enough money into it to take care of the pet for its expected lifetime. This will also need to include money to meet possible healthcare costs. In order to get proper guidance for a pet trust, be sure to contact Scott Schomer at LA Probate Law, who can provide you with the guidance and paperwork you need.
LA Probate Law and Trusts You Should Know About
- Ideas for Eco-Friendly Estate Planning - February 15, 2024
- What to Do After a Terminal Diagnosis: A Practical Guide - February 14, 2024
- The Importance of Estate Planning for Members of the LGBTQIA+ Community - February 10, 2024