How a Trust Fits In Your Estate Plan

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How a Trust Fits in Your Estate Plan
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Trusts Have Changed
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Historically, trusts were a legal tool used most
often by wealthy families as a way to pass down
the family wealth from one generation to the next
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Trusts have evolved over the last century and,
consequently, have become a common addition to
the average estate plan
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What Is a Trust
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A TRUST IS A LEGAL ARRANGEMENT in which one or
more persons hold property subject to certain
duties to use and protect it for the benefit of
others
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Elements of a Trust
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Grantor person who creates and funds the trust
Trustee person or entity that oversees the
administration of the trust and manages trust
assets
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Beneficiary person, entity, or even pet that
benefits from the trust
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Terms created by the grantor that dictate how
the assets are to be managed and distributed to
beneficiaries
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Assets used to fund the trust. Can be cash,
real property, securities basically anything of
value
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Testamentary vs. Living
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Testamentary trust takes effect upon the death
of the grantor
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A testamentary trust is often used to guard
assets for minor children upon death of parent
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Living trust (inter vivos) becomes effectives
when all requirements for creation are met and
assets transferred in to fund the trust
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Irrevocable vs. Revocable
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REVOCABLE TRUST allows grantor to modify,
change, even terminate trust at will
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IRREVOCABLE TRUST does not allow grantor to
make any changes once created
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Testamentary trust is always irrevocable because
grantor is no longer around when trust becomes
effective
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Tax Avoidance and Trusts
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Tax avoidance is a common reason to use a trust
in an estate plan
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Assets transferred to an irrevocable living trust
are no longer owned by the grantor, meaning they
are not subject to gift and estate taxes at the
time of the grantors death
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Trusts and Probate Avoidance
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The larger the estate the longer it takes to
probate as a general rule
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Trusts and Incapacity Planning
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A comprehensive estate plan should include an
incapacity plan
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A trust can be a valuable incapacity planning
tool
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Special Needs Planning
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A trust can be a valuable special needs planning
tool
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Cant gift assets directly to special needs
individual because he or she could lose
eligibility for federal benefit programs
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A special needs trust (supplemental needs trust)
created for this situation
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It is recognized by federal government if
drafted properly
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A special needs trust allows you provide
financial support to special needs individual
without losing eligibility to assistance programs
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Charitable Trusts
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Charitable lead trust provides for charity first
and then remainder to non-charitable beneficiary
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Charitable remainder trust provides for
non-charitable beneficiary first with remainder
to charity
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Get in Touch to Schedule a Free Estate Planning
Consultation
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If you live in the NY metropolitan area, we
invite you to contact the Law Offices of Barton
P. Levine to set up a free consultation
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Law Offices of Barton P. Levine
www.bartonlevine.com
[phone]