Estate plan involves important decisions and plans over your future and that of your loved ones. Estate plans, concerns what happen to your assets, finances both while you are alive and well or dead, how you want to share your assets to family, children or spouse, who takes over making certain important decisions for you in cases of mental incapability and lastly transfer of ownership of a property.
Through a number of documents, you can save your finances and prevent them from been ruin. Although it is advised you consult Estate planning New York Lawyers to help you with the appropriate document inclusion.
Understanding revocable trust
Revocable trust, also known as living trust are effective tools to avoid probate and to ensure the safety, protection of your estate even after transferring them to desired beneficiaries. Through living trust, you can have anyone whom you solely desire manage and make financial decisions over your assets both while you are alive or dead as well as when you become mentally incapacitated. Although, living trust are in various forms and as such require knowing the right documents, the legal procedures to filing this documents, and consequently you understand the basics of the living trust.
However, consulting an estate attorney, while making estate plans, can make the process of trust plans less complicated. Trust are important to ensure that you and loved ones or benefactor, have their financial future covered.
Nevertheless, asides from easing the burden and excess cost on you and your loved ones, there are few things you should know about the revocable trust.
You don’t need to put all your asset into a trust
Assets with named beneficiaries such as bank accounts, retirement accounts are usually passed directly to beneficiaries without probate. As such, you don’t need to name them in your trust. However, in some cases, for example, when a child is a named as primary beneficiary on a life insurance, guardianship may be required. However, when the beneficiary is named in the trust, you can specify how and when you want the asset distributed.
Revocable trust is different from a will
A revocable trust is different from will. This distinction can be seen in the way each documents are executed and their benefits. Living trust are legal documents through which you place your assets for protection and also easy transfer of estate to appointed beneficiary called the successor trustee. A will however, is a written legal document with a plan to distribute your assets upon your death. More importantly, creating a trust doesn’t get you out of writing a will.
Making a decision between a Trust and a Will comes down to personal decisions on your estate plan. There are various types of trust, the irrevocable and revocable trust.
Revocable Trust prevents unwanted guardianship
In the process of creating a living trust, you name a trustee, who takes over making financial or medical decisions for you when you are unable to dos so. This trust is only implemented when you become incapacitated. A court proceeding would no longer be needed for establishing guardianship and appointing a legal guardian for you. Your trustee as stated in the revocable trust would step into this decision making duty of managing your estate and other affairs. Furthermore, you can also use the living trust to name a suitable and desired guardian for a child.
Exceptions of revocable trust
No tax savings: even though the assets transferred into the revocable trust would be out of the grantor’s probate estate, estate taxes would still be charged. However, to enjoy and avoid excessive taxes, an irrevocable trust, should be used. Under the IRS law, the only trust that avoids estate taxes is the irrevocable trust.
No asset protection: since the type of living trust allows the grantor the power to revoke the trust, there is no guarantee on asset protection. Revocable trust allows the trust maker to revoke and change any beneficiary named on a trust.
Contact an estate planning attorney close to you
It is important to seek professional help from the estate planning lawyer. Greatly experienced in Trusts and estates, he’ll offer you professional advice and help in creating a trust that serves your estate goals. Are you living anywhere with the zip code 10040? Contact a close New York Estate planning attorney today.