Written by Greg McIntyre and Brenton Begley, Estate Planning and Elder Law Attorneys at McIntyre Elder Law
- Understand What a Trust Is: A trust is a legal arrangement where a person (the trustor) transfers assets to a trust, managed by a trustee, for the benefit of a beneficiary.
- Identify Your Goals: Before deciding on a trust, clearly identify your estate planning goals. Are you looking to avoid probate, protect assets from creditors, plan for incapacity, or provide for a special needs family member? Each goal may require a different type of trust or legal arrangement.
- Know the Difference Between Revocable and Irrevocable Trusts: A revocable trust can be changed or revoked by the trustor during their lifetime, while an irrevocable trust generally cannot. Each has its benefits and drawbacks and is suitable for different situations.
- Consider Your Estate Size: Generally, the larger your estate, the more you might benefit from a trust. However, trusts can also be beneficial for smaller estates with specific needs or goals.
- Consider Tax Implications: Certain types of trusts can help minimize estate taxes, but this is more relevant for larger estates. Also, keep in mind the tax implications of transferring assets into and out of trusts.
- Understand the Costs: Setting up and managing a trust can be costly. It’s important to weigh these costs against the potential benefits a trust may provide.
- Consider Your Privacy Needs: A will becomes part of the public record when you die, but a trust can provide more privacy as it does not go through probate.
- Think About Control: With a revocable trust, you can maintain control of your assets during your lifetime. An irrevocable trust, however, involves giving up some control over your assets, which can be a difficult decision.
- Consult a Professional: Trusts can be complex, and it’s essential to consult with an estate planning attorney or elder law professional. They can help you understand the nuances of each type of trust and guide you toward the best decision for your circumstances.
- Keep Your Plan Updated: Once you’ve set up a trust, it’s important to revisit it periodically, especially after major life events. Changes in your personal situation, tax laws, or state laws can all affect your estate plan.
Remember, this guide is only a starting point. It’s crucial to consult with a professional in your area, such as McIntyre Elder Law in North Carolina, to get advice tailored to your unique situation. Schedule your FREE consult today by calling 1-888-999-6600 or schedule at: mcelderlaw.com/scheduling.