Trusts are wonderful tools to simplify estate administration when someone passes away, protect assets from taxation and creditors, and shield vulnerable family members. Trusts can avoid probate at death, control distributions to loved ones, and protect assets in the event of disability. Trusts come in lots of shapes and sizes. Here are just a few types of trusts Jamie drafts for her clients:
Revocable Trusts (Living Trusts). These are the most flexible and often used trusts. They are substitutes for wills, and properly drafted and funded, they avoid probate, protect assets in the event of disability, and simplify the estate administration process. Revocable trusts can include other more specialized trusts. Revocable trusts can be an indispensable part of an estate plan including medical powers of attorney and living wills.
Special Needs Trusts. Designed for beneficiaries with disabilities, assets inside a special needs trust are not counted as resources of the beneficiary, allowing disabled beneficiaries to continue to receive governmental benefits like Medicaid
Life Insurance Trusts. Clients wanting to purchase large insurance policies often use a carefully drafted trust to own the policies, which can make the proceeds completely protected from estate taxes at the client’s death.
Personal Residence Trusts. Estate taxes can be minimized by transferring a house to a qualified personal residence trust (a QPRT). The benefit of avoiding estate tax must be balanced against income tax consequences. QPRTs can be a powerful tool, but make sense for only certain clients.
Charitable Remainder Trusts. Clients who intend to make charitable gifts at their death can enjoy current income tax deductions while retaining a stream of income from their investments or other assets. These trusts can be very appealing for clients anticipating a large income tax obligation.