3 Reasons Why Trusts Are Important for Estate Planning
Estate Planning | Trusts are one of the more complicated methods of estate planning. One needs to have an attorney by their side to help them decide if it is even the right choice for them. A trust can have many advantages for the individual.
Probate is Avoided
The process of creating a trust is a lengthy one but it does help avoid probate. There are three main parties, the settlor, trustee and beneficiaries. The beneficiaries get the assets that are in the trust and the settlor is someone who makes the trust. The trustee is responsible for taking care and managing the trust until the conditions for transfer to the rightful beneficiary are met. The way it avoids probate is that one’s inheritance is already part of the trust so there is nothing to be distributed.
Taxes are Avoided
This may sound like tax evasion, but it is legal. There may be taxes that you have to pay when you have assets but if you transfer them to a trust then it reduces some of the taxes that one pays for their property. However, if someone puts a joint name with their next of kin who is the beneficiary as well, they may end up paying more taxes. Why? Because the basis is also transferred to the next of kin joint account holder, increasing the tax they pay. The proceeds from the trust can be used during the lifetime if the revocable trust option is used.
Giving Back to the Community
Depending on what trust you opt for, you are giving back to the community to ensure that your legacy lives on after you move on. If you want to know more about the intricacies of setting up a trust, contact an elder law attorney to guide you through the process. Call the Law Office of Michelangelo Mortellaro P.A. for help 813-534-6877.