The foundation of a good estate plan is a will. However, many situations call for additional flexibility to meet the needs of dependents or family members after your death. Trusts are invaluable estate planning instruments when you wish to provide ongoing support for a loved one or a charitable cause after your death.
At Neal Ashmore, we know each client is different and has different estate planning goals. Our lawyers help clients create trusts and other estate planning documents that ensure each loved one’s needs are met and the client’s desires are respected.
Trusts have a wide range of uses. They allow you to place money and other assets into an account controlled by a trustee — the person or bank whom you choose to administer the trust. The trustee then distributes the assets to the people or organizations you designate as beneficiaries. You control the timing and amount of the distributions by detailing it out in the trust documents.
Our lawyers often encourage clients to consider trusts in the following situations:
- You have minor children
- You wish to provide for a disabled adult child or anyone who has special needs
- You have complex real estate holdings and would like that property to benefit your family.
- You wish to use your assets for a specific purpose, such as paying for the education of a loved one.
- You would like to set up a charitable organization or contribute to an existing one.
The law allows for the creation of many different types of trusts, each of which operates differently and is used for different purposes. The differences between the trusts are legal and technical in nature, and best explained during a consultation with one of our lawyers. However, we have created a brief list of a few trust types and when they might be useful:
- Revocable trusts — These trusts are created during your lifetime and allow you to receive the income from the trust while you are alive, and then designate beneficiaries to receive it after you die. You can modify the trust at any time.
- Irrevocable trusts — These trusts are useful when estate taxes are a concern. Ownership of assets is given to the trust, which means they are no longer part of your taxable estate. You cannot modify this trust after it is created.
- Living trusts — useful when planning for your own incapacitation and when you fear there may be conflicts over your will
- Special needs trusts — useful when you wish to provide for a person with a disability
- Charitable trusts — useful when you want your assets to be used by a charity of your choice
- Spendthrift trusts — useful when you are concerned that your beneficiary may spend money unwisely if given everything all at once
