“We’re paying the highest tribute you can pay a man. We trust him to do right. It’s that simple.”
After you die, what do you want to happen to your beloved home? What will happen to your vacation property? What about your heirloom jewelry? Even your priceless art objects? This is where trusts come into play. They are extremely important when you have tangible items that you want protected!
If your possessions are not properly protected, then the courts may decide the disposition, and you may be leaving your loved ones with a large tax bill. Unfortunately, some families have had to sell items in order to pay taxes on an inheritance.
A Trust is part of an estate plan in which certain conditions must firstly exist before it’s usable; this includes giving away or selling all rights over property owned by one person so another may assume control over its management – called “testamentary capacity.” Thereafter any money arising from these actions could then go into trusts during the owner’s life (” during” meaning either now OR at death).
My Family’s Story
My family set up two trusts for our parents. The first was for the property and the house where my parents lived.
The second was for a farm inherited by our father. His maternal grandparents came from Norway, and settled in northwestern Minnesota. His mother inherited it with her seven siblings, which then trickled down to lots of cousins. Dad bought the shares from his cousins and his deceased brother’s sons, thus, the farm was solely owned by Dad. Our brother is the trustee for the farm trust, and has spent many years improving the value of the property.
Once my father understood that a trust would ensure the farm stayed in the family, he signed willingly. Dad didn’t trust anyone in general, and so turning the farm over to my brother was fine with him. Dad’s directive was “don’t let those sonsabitches in the government get it.”
What is a trust?
A trust is a set of instructions to ensure that your assets are protected during your lifetime. There are many types, each of which outlines different goals and has different purposes. You can have more than one, but this is all dependent on your assets.
The most important aspect of a trust is that it is susceptible to the least amount of change. This means you want an estate plan with as few hurdles and restrictions on your family’s future plans for themselves, their money or property – especially if they are going through tough times financially like many Americans today, especially after retirement when Social Security doesn’t provide enough income anymore!
Some trusts are IRREVOCABLE. This type requires that you give up control of your assets during your lifetime. Sounds scary, doesn’t it? Your trust will have a trustee, chosen by you, who will manage the trust and the assets you include in it. As in the case of our farm, this trust was the best option, because Russ was taking all the responsibility for over 400 acres of land, as well as the infrastructure. He has complete control of everything, which includes miles and miles of government red tape and stacks of forms that need annual updates.
Other trusts are REVOCABLE. The trustee of this type is usually you, but you also name a trustee who takes over the trust if you die, or if you can no longer manage your own affairs. If you have a falling out with your designated trustee, rest assured, you can replace him or her.
You may have heard of a MILLER TRUST. This particular type is used to hold income for someone who is trying to qualify for Medicaid. I want to address this trust when we discuss applying and qualifying for Medicaid, but that will be in its own post.
These are the most common trusts, and each type has its own set of rules, its own purposes, and its own pros and cons.
A trust can help avoid probate and make the process easier for everyone involved. Trusts are a smart way to protect your assets and provide peace of mind for you and your loved ones.
Here are a few reasons to create trusts as part of estate planning.
- -A trust is a private document, meaning that it does not become a public record when you die. This can help protect your privacy and the privacy of your loved ones.
- – Trusts are exempt from most inheritance taxes, which can save your loved ones a lot of money.
- – Trusts can be set up to distribute assets if the owner dies intestate (without a will).
What is probate?
Probate is the legal process of transferring property from a deceased person to his or her heirs.
What is the probate process?
Probate is the legal process of settling a person’s estate after they die. This process includes identifying and inventorying the deceased person’s assets, paying any debts and taxes owed, and distributing the remaining assets to the beneficiaries named in the will.
The probate court oversees this process, and it can be expensive and time-consuming. The average cost of probate in the United States is about 2% of the estate’s value, but it can be much higher in some states.
What is a trust designed to do?
The trust is the legal owner of the property, and the heirs are designated as beneficiaries. This eliminates the need for the property to go through probate.
A trust is a legal way of transferring property from a deceased person to their heirs. This can be a time-consuming and expensive process, especially if there is a lot of property to be transferred. In some cases, the estate may have to go through probate even if there is a trust in place.
If you are interested in creating a trust, please consult with an estate planner.
How do trusts help to avoid probate?
Trusts are created during a person’s lifetime, and assets are transferred into the trust. The trust document names one or more trustees, who manage the trust assets for the benefit of the beneficiaries. When the grantor dies, the assets in the trust do not have to go through probate.
It allows you to transfer property to your heirs without going through the legal process. This can save you time and money. trusts are also a good way to protect your assets from creditors. If you have a trust, your property will be distributed according to the terms of the trust, even if you die intestate (without a will).
A trust can help protect your estate from inheritance taxes.
Inheritance taxes are a tax on the right to receive property from a deceased person.
They are typically paid by the estate of the deceased, but may also be paid by the beneficiary of the inheritance. The tax is based on the value of the property received.
Trusts can help reduce or eliminate estate taxes, making them a powerful tool for estate planning.
How can a trust protect assets from creditors?
Creditors cannot touch assets that are held in a trust. This protection is especially beneficial for high-value assets, such as a family home or a business. By placing assets into a trust, you can avoid the probate process and keep them out of the hands of creditors.
If you are interested in protecting your assets from creditors, it is important to consult with an attorney who specializes in trusts and estates. He or she can help you create a trust that will meet your specific needs.
Why Should I Have One?
- Trusts Avoid Probate
- They Are Private
- Trusts Control Inheritances
- They Help during Periods of Incapacity
- Trusts Can Protect Your Assets From Creditors