Jeddeloh Snyder PA Attorneys at Law can assist you with the following estate planning and elder law issues
- Probate of Estate
- Testate Estates
- Intestate Estates
- Special Needs Trusts
- Supplemental Needs Trusts
- Revocable Living Trusts
- Irrevocable Trusts
- Charitable Trusts
- Living Trusts
- Asset Protection
- Medicaid Laws
- Gifts to Minors
- Probate Litigation
- Power of Attorney
- Will Contests
- Family Business Succession Planning
Trusts – What Are They and How Do They Help?
A trust is created to ensure a successor is appointed to deal with your estate at the time of your death or if you become incapacitated. Many people set up trusts in order to avoid their estate going into probate (a court process in which someone will legally be appointed to represent the deceased) and other complications. With many types of trusts available, let our experienced attorneys help you choose the right kind of trust for you and your estate. The following options provide information to consider when deciding if a trust is the right choice for you.
Living trusts are designed to hold the trust maker’s assets and help them manage their affairs while they are alive. Assets placed in this trust will continue to benefit you throughout your lifetime. The trust maker, trustee, and beneficiary are typically the same person. A successor trustee should be designated in the event of mental incapacity or death. Having a living trust will make it a lot easier for a trustee to take over the management of assets. The three most important reasons to have a living trust are to avoid probate, save money, and maintain the privacy of your estate.
Probate occurs when there is no trust or if things are unclear. With a living trust estate planning is very important to avoid probate, which means assets can be distributed quicker. Although there are costs associated with creating a living trust, in the long run, a trust will save money. Finally, after death, a trust is not made public. The trust will allow you to keep your privacy.
Special Needs Trusts
Special needs trusts are created to benefit people with physical and/or mental disabilities. These trusts are used to manage any real estate, belongings, and money owed by the beneficiary. The person that is benefiting from the trust is the beneficiary, and the person in charge of managing those assets is the trustee. When trusts are formulated the important criteria to remember are the needs, lifestyle, and future of the beneficiary.
Depending on the owner of the property the special needs trust will either be first-party or third-party. Trusts are considered third-party when the property (real estate, money, belongings) is owned by someone else such as a parent. First-party trusts hold assets owned by the person with special needs, such as money from an accident or inheritance. If a loved one left the disabled person money through their will it may disqualify them from governmental benefits. Special needs trusts ensure the person will continue to receive government assistance.
Supplemental Needs Trusts
Supplemental needs trusts and special needs trusts are essentially the same thing. The trust was first known as a supplemental needs trust because of its purpose to supplement the need for public government programs. It has since become known as a special needs trust which better expresses the beneficiary’s needs.
Revocable living trusts are also known as living trusts. They are considered revocable because over time changes may be made to the trust as circumstances or wishes change. Trusts are considered “living” because they are created over your lifetime. Living trusts are a great way to avoid probate. Probate is when the court determines where a person’s estate is divided up.
When the trust maker is living they can invest or spend any assets included in the trust. Since the trust is revocable the owner can make changes along the way. When the trust maker becomes mentally incapacitated and can no longer make decisions, management of the trust then goes to the successor trustee. Whoever takes over responsibility can then manage the original trust maker’s estate. Revocable trusts automatically become irrevocable when the trust maker passes away. No additional changes may be made to the trust. The successor trustee then has the responsibility to distribute any remaining assets as listed on the trust and pay any outstanding bills, taxes, and debt.
Irrevocable Living Trusts
Irrevocable trusts are the opposite of revocable which means they can not be changed without the beneficiary’s permission. There are a variety of different reasons to set up an irrevocable trust including estate and tax considerations. Irrevocable trusts are protected against creditors and are commonly used for estate tax reduction. Beneficiaries can ensure their assets are preserved.
Charitable trusts are used in order to leave some or all of a person’s estate to charity. There are many ways to set up a charitable trust, so it is best to discuss these options with an experienced estate planning lawyer. Two common ways are to either leave a certain amount to be paid to the charity and the remainder to go to the beneficiaries or vice versa. These trusts are typically tax-exempt and the charity in which the assets will be received must be approved by the IRS. One of the major benefits to charitable trusts is the tax breaks received. When the trust is eventually passed on to the donor’s heirs, estate taxes are dramatically reduced.
Ready to take the next step in your estate planning?
Trusts are a great tool to use in order to ensure exactly how assets owned will be managed in the future. This task will have a large impact on you and the lives of those around you. Make sure to have someone trustworthy to help in deciding which options are best for the specific situation and person. Jeddeloh & Snyder provides clients with experienced and trusted representation.
Do you have questions about your estate?
Estate planning is a complicated matter filled with questions and uncertainties. Our estate planning attorneys are here to help! Contact us for an initial consultation with one of our experienced and trusted attorneys. State planning and trusts attorneys have the answers to your questions and can help you plan a secure future for you and your family. Call us at any of our three convenient office locations, or complete our consultation form and we will contact you.