Trusts are an important part of estate planning. There are a few different kinds of trusts that offer tax advantages to those who use them for estate planning purposes. The most commonly used trust is a revocable living trust but others trusts, such as a generation-skipping trust, qualified personal residence trust and qualified terminable interest property trust, also have tax advantages and make excellent choices when moderately wealthy people plan their estates.
One of the main benefits of trusts is to protect assets from estate taxes. Depending on the state where you live when you die, estate taxes can take a substantial portion of your estate if you don’t have some or all of your assets protected by a trust. Life insurance policies are often kept in trusts to ensure that heirs receive the proceeds of the insurance.
Probate can be a lengthy and expensive process. While some assets are not subject to probate, such as IRAs, 401(k) accounts and other accounts with beneficiary designations, most other assets may have to go through the probate process. By holding those assets, such as a home, in a trust, you can help your heirs get their property quickly.
With a trust, you can have control over the assets you leave to your heirs after you die. Through careful estate planning Honolulu HI residents can set up a trust that disburses funds to your intended heirs based upon your wishes. You can use a trust to ensure that your children are provided for on a long-term basis. When you have a lot of money to leave to minor or adult children, you can direct the trustee to give the children a specified amount of money per month, per year or a lump sum when they reach a certain age or meet other conditions.
When working with an attorney who has experience in estate planning Honolulu HI residents should know about the benefits of the many trusts that are available. Each type of trust has its own benefits and you should discuss the advantages and disadvantages with an attorney before making a decision. For more information about how a trust can help you with your estate planning, click here.
