Top Reasons to Establish a Family Trust
Establishing a family trust is amongst the most popular estate planning strategies. Often known as a living trust, this technique entails switching ownership of property, possessions, and financial investments to avoid probate and expedite estate settlement procedures.
Although setting up a family trust isn't difficult, most individuals prefer to work with an estate attorney. People are often confused by legal terminology and uncertain about how to prepare trust documents. Furthermore, trusts have to be funded in accordance with specific rules established by each state.
Hiring professionals will make the process easier and ensure everything is setup in accordance with state law. Estate attorneys undergo many years of education and know exactly which strategies will offer the highest level of protection. Lawyers can also offer guidance about strategies that lessen estate and inheritance taxes.
People generally setup trusts to avoid probate and ease the reconciliation process for estate administrators. Probate is used to account for all property owned by decedents; pay outstanding debts; and legally record transfer of assets to beneficiaries.
The probate process can be lengthy and in some cases results in family disputes that lead to having the last Will contested. If this occurs, probate can last many months and often results in reduced inheritance to all parties involved.
The good news is there are many tactics that can be used to transfer ownership of property and bypass the probate process. The most common approach is to setup a family trust.
Any property that is placed into a trust is no longer owned by the individual. Instead, assets are owned by the trust. Property owners must obtain new property titles listing the trust as the owner. This also is performed for bank accounts and financial investment holdings.
Acquiring new titles or having financial accounts transferred to trusts isn't hard to do, but will take time. Proper paperwork must be filed in order for the trust to be funded properly. If these steps are not taken there can be major problems upon death that could prevent heirs from receiving inheritance property.
Married people have a tendency to use living trusts so they can maintain control of their property individually or together. Living trusts let each partner act as the Trustee until death. Upon death, the surviving spouse assumes the role of Trustee and acquires ownership of property.
People who are designated to receive inheritance property are known as beneficiaries. In most cases, beneficiaries of family trusts include spouses, children, and direct lineage relatives such as parents or siblings. Whenever minor aged children are beneficiaries, a child trust fund can be established to safeguard their inheritance until they reach legal age.
Family trusts supply many benefits to everyone involved. Trusts offer added protection than cannot be obtained from a last will and testament. Furthermore, they are the best way to avoid probate.
When arranging a trust it is important to name a successor Trustee. This person can take care of personal finances if you are declared incapacitated by a physician. Naming a successor will prevent hardship for family members. They won't have to hire a lawyer and make a court appearance to gain control of personal finances or to obtain guardianship rights.
Last, but not least, living trusts ought to include medical and personal power of attorney forms. Medical power of attorney allows a person to make healthcare decisions for the Trustee if situations occur that render them incapable of making decisions.
Although setting up a family trust isn't difficult, most individuals prefer to work with an estate attorney. People are often confused by legal terminology and uncertain about how to prepare trust documents. Furthermore, trusts have to be funded in accordance with specific rules established by each state.
Hiring professionals will make the process easier and ensure everything is setup in accordance with state law. Estate attorneys undergo many years of education and know exactly which strategies will offer the highest level of protection. Lawyers can also offer guidance about strategies that lessen estate and inheritance taxes.
People generally setup trusts to avoid probate and ease the reconciliation process for estate administrators. Probate is used to account for all property owned by decedents; pay outstanding debts; and legally record transfer of assets to beneficiaries.
The probate process can be lengthy and in some cases results in family disputes that lead to having the last Will contested. If this occurs, probate can last many months and often results in reduced inheritance to all parties involved.
The good news is there are many tactics that can be used to transfer ownership of property and bypass the probate process. The most common approach is to setup a family trust.
Any property that is placed into a trust is no longer owned by the individual. Instead, assets are owned by the trust. Property owners must obtain new property titles listing the trust as the owner. This also is performed for bank accounts and financial investment holdings.
Acquiring new titles or having financial accounts transferred to trusts isn't hard to do, but will take time. Proper paperwork must be filed in order for the trust to be funded properly. If these steps are not taken there can be major problems upon death that could prevent heirs from receiving inheritance property.
Married people have a tendency to use living trusts so they can maintain control of their property individually or together. Living trusts let each partner act as the Trustee until death. Upon death, the surviving spouse assumes the role of Trustee and acquires ownership of property.
People who are designated to receive inheritance property are known as beneficiaries. In most cases, beneficiaries of family trusts include spouses, children, and direct lineage relatives such as parents or siblings. Whenever minor aged children are beneficiaries, a child trust fund can be established to safeguard their inheritance until they reach legal age.
Family trusts supply many benefits to everyone involved. Trusts offer added protection than cannot be obtained from a last will and testament. Furthermore, they are the best way to avoid probate.
When arranging a trust it is important to name a successor Trustee. This person can take care of personal finances if you are declared incapacitated by a physician. Naming a successor will prevent hardship for family members. They won't have to hire a lawyer and make a court appearance to gain control of personal finances or to obtain guardianship rights.
Last, but not least, living trusts ought to include medical and personal power of attorney forms. Medical power of attorney allows a person to make healthcare decisions for the Trustee if situations occur that render them incapable of making decisions.