New York Estate Planning & Elder Law Blog
Many people fail to engage in any type of estate planning. Statistics compiled by AARP suggests that approximately 60% of Americans lack a will or any type of estate planning.
Of the people who do decide to create plans for what happens in case they die or become incapacitated, many rely on only a will to determine how their assets will be divided.
In many cases, however, people benefit from the creation from other estate planning tools including trust, which have the potential to serve a number of unique purposes.
A trust refers to a type of agreement between a person who creates a trust and a person who manages this account. This article reviews just some of the reasons why you should consider creating a trust.
# 1 – Trusts Offer Protection
There are a number of critical things that can be protected with the creation of a trust.
For one, it is possible to pass assets in a controlled manager through a trust to beneficiaries who have poor money management skills and who might unwisely spend assets if received in a lump sum.
In other situations, if a beneficiary has creditors, it is possible to pass assets to the individual without this amount being collected on.
It is possible to use a trust to protect some assets from being lost in the divorce process. Trusts can also be used make sure that funds are allocated to provide support to a loved one in case you become incapacitated.
# 2 – Trusts Provide Asset Management Benefits
Many people who create trusts discover that they offer a number of unique advantages when it comes to managing assets.
Trusts allow individuals an effective way to manage assets that are not easily divisible. People also discover that trusts allow them to manage business assets as well as life insurance policies.
# 3 – Trusts Can Help Achieve Unique Planning Goals
Trusts can be created to achieve unique goals. Trusts can be structured to achieve certain goals while also taking investment and economic factors into consideration.
The most common type of trust used in estate planning are revocable or living trusts, which are not funded until a person’s death and include instructions about how a person wants their estate to be divided among their loved ones.
For people who have minor children, these trusts often designate the agent who will be tasked with making financial decisions on behalf of these children as well as providing funds to make sure that education and health costs for the children are paid.
# 4 – Trusts Can Reflect a Person’s Life Stages
Trusts can be created to reflect the various concerns and estate planning goals held by people at different stages of their life.
For example, for working individuals with young children, trustees are able to make distributions for children. If the children are grown, it is possible to structure a test to provide for a surviving spouse as well as any grandchildren.
Speak with an Experienced Estate Planning Lawyer
While trusts might seem like a complex estate planning tool, a skilled estate planning lawyer understands how to create one as well as how to anticipate the various problems that can arise.
Contact Ettinger Estate Planning today to schedule a free initial consultation.