The primary reason people give for estate planning is to ensure their final wishes about the distribution of their assets are carried out. Examples of final wishes you may include in a will are how and where to bury you, how to dispose of your personal property and what to do with the family home. Once you begin including other factors, such as tax planning, the desire for keeping your financial affairs private or handling multiple real estate holdings, your estate plan becomes more complex.
Benefits of a trust
Complex estate issues might cause your attorney to recommend a trust. Trusts might also be recommended if you believe your family members to whom your estate is to be distributed might have difficulty managing what they receive. A trust can protect beneficiaries from creditors or others who might seek to take advantage of them.
Protecting distributions to minors
When part of your estate is going to a minor, you may designate the circumstances and conditions under which money can be distributed and what restrictions, if any, are placed on the use of the funds. When forming the trust for a minor, a trustee or custodian is designated to oversee its administration. If a trustee is unwilling to serve or a custodian is not designated, a court-designated guardian may be appointed.
A trust may be structured to disburse funds only for a specific purpose, such as to pay for a minor’s education and to pay for the child’s health needs until he or she reaches an age that you designate in the trust. It is important to keep in mind that money cannot be withheld for illegal reasons or those that go against public policy, such as restrictions that heirs must marry within a religious, racial or ethnic group. Naturally, the trust can be structured for the benefit of a minor without any restrictions.
Funding a trust
A revocable trust may work as an alternative to a will. Once created, a revocable trust may be funded during your lifetime or after. Funding a trust occurs when assets whether money or real estate is placed in the trust. The assets may also be placed into the trust after the death of the initial beneficiary or its creator.
Speak to a trusts and estate planning attorney
Other matters to be considered with trusts include tax planning and who may serve as trustees. To discuss the benefits of a trust in more detail schedule a consultation with one of the knowledge and experienced estate planning lawyers at McKenna Storer. For additional information about this topic, contact Jaime Dowell at 815-334-9693.