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Senior Retirement Tips :: Estate Planning and Trusts
Estate Planning and Trusts: How Trusts and Proper Estate Planning Can Protect Your Family
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Estate planning and trusts are all about planning not only for your own future, but also the financial well-being of your family and loved ones after you're gone.
However, the reality of life can often get in the way of a smooth transition - divorce, second marriages, stepkids, long-term illness and other family changes make life and estate planning sometimes a little unpredictable.
Securing your wealth and your legacy is about more than having a will that simply divides up your assets - it's about addressing specific family needs. Trusts can help you do that. To learn how, keep reading.
Trusts are For Everyone
Most people assume that estate planning and trusts are for the ridiculously wealthy or people who need to lower their tax rates, but that's not true.
Trusts are an incredibly versatile estate planning tool that allows you to address inheritance goals for your heirs - who may still be children, are disabled, are from a mixed family or answer difficult questions like who will manage your trust if you become incapacitated (a living trust).
How to Set Up a Trust
To set up a trust, you need to consult your estate planning attorney. They will help you set up a trust that helps you address your particular needs and goals. You can expect to pay anywhere from about $1500 for a basic trust to about $5000 for a trust that's complicated or connected to a sizable estate.
Trusts for Minors
Transferring your assets to a child after you pass is typically done through a custodial account at a bank or to simply bequeath any assets in your will. Unfortunately, both of these methods give the child untethered access to the finds when they turn 18 or 21, whether he or she is ready for it.
Alternatively, a trust for minors will hold the assets for the child beyond the age of majority and can even dictate how the money is to be used. For example, many grandparents set up an education trust for their grandchildren, stipulating that the money must be used for educational purposes.
Trusts for People with Special Needs
If your heir is disabled, either mentally or physically, a trust is essential for protecting their well-being after you've passed. Unfortunately, these trusts can be very complicated as the money paid from a basic trust will often be counted as income, therefore disqualifying the disabled person for government aid or Medicaid.
Instead, a special-needs trust will protect your heir's eligibility for financial assistance, but continue to provide support. They will also protect the inheritance from potential squandering or mismanagement.
Remember, estate planning and trusts are critical for the well-being of your remaining heirs. Don't put it off until it's too late.
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SeniorRetireTips.com :: Estate Planning and Trusts