How Do Trusts Fit Into Estate Planning? Trusts are commonly used because they are an ideal way to control property held by individuals or married persons. By using trusts, the grantors (person who created the trust) decide how they are going to maintain and control of their estate during their life
1
How Do Trusts Fit Into Estate Planning?
Trusts are an ideal way to control property held by individuals or married persons. By using trusts, the grantors (grantor = person who created the trust) decide how they are going to maintain and control all assets they accumulate in their lives, decisions that survive their incapacity (mental disability) or death.
The idea of building a plan is to begin with the foundation, i.e., what is most important – the grantor’s control over their wealth. Then we build up with the protection of the grantor(s) and grantor’s family’s health wishes, and protecting the wealth they already have and the values and legacy they have already built. We finish the plan with probate and taxes because even though these issues require more technical expertise, they are not necessarily the most important part of the plan.
In our view, too many lawyers focus on probate fees and taxes in order to show off their technical expertise. Your plan should be yours.
2
Examples of Poor Planning
For example, one could save every last nickel of probate fees and taxes, but the estate may end up with an unintended heir. If, for example, the child of a future (currently unknown) spouse inherits the estate (in a situation called a “laughing heir” in law school), then the plan has failed.
If your wealth misses your heirs (of your original marriage) because protections were not in place in the first couple’s estate plan to prevent the survivor from remarrying, then adding a new spouse to title (an easy and common mistake), can result in unintended heirs. This can happen regardless of who survives, leaving the original couple's wealth to the children ot the second spouse’s prior marriage.
That is a bad result under any circumstance.
Maybe. Each case is different. It is important to remember that a revocable living trust is only a part of a comprehensive estate plan. The Myers law Firm provides legal services r
Comments - add comment