Estate Planning and Trusts – What You Should Know
Estate planning and trusts are important factors that you must contemplate as you reach the later stages of your life. It is human nature to want to take care of those who you leave behind in this world; therefore, the idea of asset protection trusts that help your loved ones avoid probate and appointing someone to take care of your property and personal assets after passing away is ideal.
This way, you can make sure that your wishes are followed and that your family is well taken care of. Of course death does not just visit those late in life so it is much better if you handle these plans now.
Decisions about estate planning, and trusts of various types
The people who you appoint to oversee your asset protection trusts and living trusts are known as trustees. You can call on one single person to oversee your entire estate or you can appoint multiple trustees, who are each designated to a certain area of your personal assets.
You can also name trustees who have the ability to fire your existing trustees and contract new ones, in order to ensure that only the best decisions are made while handling your estate.
There are multiple types of asset protection trusts that you should look into while learning about estate planning and trusts. Let’s take a look at some of the most common types of trusts:
- Accumulation Trusts are where the beneficiaries must meet a specific term or condition in order to receive his or her part of the trust. For example, when a beneficiary must reach a certain age before they can access the trust.
- Bypass Trusts are great for married couples who have large estates because their assets will be allowed to ‘bypass’ Federal Estate Tax when the first spouse dies, if the trust is left to the other spouse. This way the estate is only taxed one time, when the second spouse dies.
- Living Trusts are great asset protection trusts, where you title assets to the trust before you die, so that they will avoid probate. Since the trust is still “living” after you die the assets held in the trust will avoid probate.
- Testamentary trusts are trusts that are created in your will after you die.
The more you learn about estate planning and trusts, the more you will realize just how crucial they both are.
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