Should I Need a Trust in My Estate Plan? This is a question many ask themselves when contemplating their own estate planning. Fed Week’s recent article entitled “Considerations for Including a Trust in Your Estate Plan” describes what a trust can offer. This includes the following:
- Protection against possible incompetency. To protect yourself, you can create a trust and move your assets into it. You can be the trustee, so you’ll control the assets and enjoy the income.
- Probate avoidance. Assets held in trust also avoid probate. In the trust documents, you can state how the trust assets will be distributed at your death.
- Protection for your heirs. After your death, a trustee can keep trust assets from being squandered or lost in a divorce.
If your heirs are young, you can set up a trust to stay in effect until they are older and can handle their own finances. Another option is to keep the trust in effect for the lives of the beneficiaries.
A trust can be revocable or irrevocable. A revocable trust must be created during your lifetime. If you change your mind, you can revoke the trust and reclaim the assets as your own.
A revocable trust can offer incapacity protection and probate avoidance but not tax reduction.
An irrevocable trust can be created while you’re alive or at your death. A revocable trust may become irrevocable at your death.
Assets transferred into an irrevocable trust during your lifetime will be beyond the reach of creditors and divorce settlements. The same is true of assets going into an irrevocable trust at your death.
Your family members can be the beneficiaries of an irrevocable trust, while a trustee or co-trustees you’ve named will be responsible for distributing funds to those trust beneficiaries.
The trustee will be responsible for protecting trust assets.
Think a Trust may be right for your situation but not sure where to start? Want to learn more about putting your own estate planning together the right way? If you or a loved one are concerned about issues with estate planning and elder law concerns including Asset Protection/Medicaid Planning and questions regarding long-term care and the nursing home, reach out to us! Book a call with us on our website: www.VAElderLaw.com to see how we can help! We have offices in Bassett, Danville and Lynchburg to serve you.
Reference: Fed Week (Oct. 5, 2022) “Considerations for Including a Trust in Your Estate Plan”
