Trusts & Estate Planning

Trusts are not just for the wealthy.

Trusts are legal mechanisms that let you put conditions on how and when your assets will be distributed upon your death. They also allow you to reduce your estate and gift taxes and to distribute assets to your heirs without the cost, delay and publicity of probate court, which administers wills. Some also offer greater protection of your assets from creditors and lawsuits.

Prevent disputes and confusion.

Inheritance can be a loaded issue. By being clear about your intentions, you help dispel potential conflicts after you’re gone.

The federal estate tax exemption changes regularly.

Because of recent changes in federal law, a very small percentage of estates will be responsible for paying estate taxes.  Further, many estate plans, including trust plans, created before 2009 have terms and strategies that are no longer necessary.   If you already have a trust plan for your family, having it reviewed by a trusted attorney to ensure that the planning is both current and efficient for your estate’s needs is very important.

Giving gifts in estate planning.

Depending on the needs of a particular estate, there are multiple strategies available to pass assets before or after death.  If reducing the size of your taxable estate is desired or necessary, one common strategy is to make annual gifts up to the amount of the annual gift exclusion allowed for that taxable year.  Paying medical and education bills for someone may also be another strategy.  Making charitable gifts is yet another common strategy.   How much to give and to whom is only the beginning.  A customized estate plan to meet your particular needs and desires can often do much more than planning for anticipated taxes.

Some general points to consider and remember:

1. No matter your net worth, it’s important to have a basic estate plan in place. Such a plan ensures that your family and financial goals are met after you die.

2. An estate plan has several elements.

They may include: a will; assignment of power of attorney; and a living will or health-care proxy (medical power of attorney). For many people, a trust not only makes sense but is the foundation of the estate plan. When putting together a plan, you must be mindful of both federal and state laws as well as practical concerns that may not be considered without the guidance of a trusted attorney.

3. Taking inventory of your assets is a good place to start.

Assets include your investments, retirement savings, insurance policies, real estate, business interests, and personal property.  You can start the process by asking yourself three questions:

Whom do you want to inherit your assets?

Whom do you want handling your financial affairs if you’re ever incapacitated?

Whom do you want making medical decisions for you if you become unable to make them for yourself?

The next step is building the framework to execute those answers and an experienced trust and estates attorney can help guide your estate plan from there.