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TRUSTS
(REVOCABLE AND IRREVOCABLE)

 

What is a Trust?
A trust is traditionally used for minimizing estate taxes and can offer other benefits as part of a well-crafted estate plan. 

A trust is a fiduciary arrangement that allows a third party, or trustee, to hold assets on behalf of a beneficiary or beneficiaries. Trusts can be arranged in many ways and can specify exactly how and when the assets pass to the beneficiaries.

Does a trust avoid probate?

Since trusts usually avoid probate, your beneficiaries may gain access to these assets more quickly than they might to assets that are transferred using a will. Additionally, if it is an irrevocable trust, it may not be considered part of the taxable estate, so fewer taxes may be due upon your death.

 

Assets in a trust may also be able to pass outside of probate, saving time, court fees, and potentially reducing estate taxes as well.

 

What are other benefits of Trusts?

Control of your wealth. You can specify the terms of a trust precisely, controlling when and to whom distributions may be made. You may also, for example, set up a revocable trust so that the trust assets remain accessible to you during your lifetime while designating to whom the remaining assets will pass thereafter, even when there are complex situations such as children from more than one marriage.
 

Protection of your legacy. A properly constructed trust can help protect your estate from your heirs' creditors or from beneficiaries who may not be adept at money management.
 

Privacy and probate savings. Probate is a matter of public record; a trust may allow assets to pass outside of probate and remain private, in addition to possibly reducing the amount lost to court fees and taxes in the process.

Is there a difference between Revocable and Irrevocable Trusts?
There are many types of trusts; a major distinction between them is whether they are revocable or irrevocable.

Revocable trust: Also known as a living trust, a revocable trust can help assets pass outside of probate, yet allows you to retain control of the assets during your (the grantor's) lifetime. It is flexible and can be dissolved at any time, should your circumstances or intentions change. A revocable trust typically becomes irrevocable upon the death of the grantor.

You can name yourself trustee (or co-trustee) and retain ownership and control over the trust, its terms and assets during your lifetime, but make provisions for a successor trustee to manage them in the event of your incapacity or death.

Although a revocable trust may help avoid probate, it is usually still subject to estate taxes. It also means that during your lifetime, it is treated like any other asset you own.

Irrevocable trust: An irrevocable trust typically transfers your assets out of your (the grantor's) estate and potentially out of the reach of estate taxes and probate, but cannot be altered by the grantor after it has been executed. Therefore, once you establish the trust, you will lose control over the assets and you cannot change any terms or decide to dissolve the trust.

An irrevocable trust is generally preferred over a revocable trust if your primary aim is to reduce the amount subject to estate taxes by effectively removing the trust assets from your estate. Also, since the assets have been transferred to the trust, you are relieved of the tax liability on the income generated by the trust assets (although distributions will typically have income tax consequences). It may also be protected in the event of a legal judgment against you.

Source: Fidelity

FORM YOUR TRUST IN 5 EASY STEPS

STEP 1: SUBMIT PAPERWORK

STEP 2: MAKE A PAYMENT

STEP 3: SCHEDULE A CONSULTATION

  • An email with instructions to schedule a consultation call will be sent to your email address.

  • The email will be sent within twenty-four (24) hours after payment has been made available.

STEP 4: APPROVE THE DRAFT TRUST

  • A draft Trust and Form SS-4 will be sent to your email address for approval.

  • The document preparation time is five (5) business days (excluding holidays).

STEP 5: RECEIVE THE FINAL TRUST AND RECORDS BOOK

  • Final documents will be sent to your email address for signatures and notarization.

  • The document preparation time is five (5) business days (excluding holidays).

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