What would you have done if someone handed you a check for $100,000 when you were seventeen years old? Most of us would have enjoyed the next year or two but then settled back into reality . . . after acquiring some lousy money management habits along the way.
For that reason, and for dozens more, may people today are opting for Living Trusts as part of their estate plan. A Living Trust allows you to direct who receives your assets, when he or she receives them, and under what conditions he or she can receive them.
There are three basic types of trusts: revocable, irrevocable and special needs. A Revocable Living Trust allows you to later change your mind and revoke the trust or provisions of the trust. While it affords great latitude, it might not provide the tax benefits of an Irrevocable Living Trust. As the Irrevocable Living Trust’s name implies, you give up the right to later change the trust but you may gain significant tax consequences. Finally, the Special Needs Trust allows you to provide for a loved one who may need additional care due to a disability or other need.
Living Trusts go into effect immediately, not after the principal’s death. Therefore, you control what assets are made a part of your trust. By moving as much as possible into the trust, you may be able to avoid the need for your heirs to probate your will, saving hassle and protecting privacy.
So why prepare a Living Trust? A trust will allow you to:
- Manage your assets and their distribution
- Avoid or limit estate taxes
- Avoid probate
- Avoid a later battle over your will
For more information and more thorough advice to help you determine whether a Living Trust is right for you, contact Garrity & Gossage, LLP at (704) 841-0661.