A trust keeps your estate out of probate. It involves three parties: You, the creator of the trust; the trustee(s) who manages and distributes your assets as directed by the terms of the trust; and the beneficiaries.
There are various types of trusts with the most commonly known type being a revocable living trust. It’s called a living trust because it’s established while you’re alive. It’s “revocable” because as long as you’re mentally competent, you can be your own trustee and change or dissolve the trust at any time at your own discretion for any reason. Typically, a living trust becomes irrevocable (cannot be changed) if you become mentally incompetent or when you die.
Your trust can also be written in a way that will pass your assets on to your beneficiaries after your death, or you can designate that they be portioned out over time and in amounts that you specify.
A living trust can provide you with the peace of mind that comes from knowing that after your death or an unexpected change in your ability to handle your financial affairs, your assets and your heirs will be protected from probate fees and state and federal estate tax elimination or reduction with proper planning. We are more than happy to discuss with you the options for saving on probate fees and estate taxes.
Yes, trusts with a complete estate plan package do cost more than a simple will to establish. A budget of approximately $1800 should be allowed to create the average trust. However, that same average trust could save descendants easily $12,000 or more in probate fees and costs.
If your estate is valued at more than the estate tax exemption, there is an estate tax. You can help reduce or eliminate the estate tax by placing some of your assets in different types of funds that remove it from qualifying the estate. Irrevocable and Charitable Trusts are often used to remove assets from qualifying for the estate tax.