Learn How a Trust Works in Your Estate Plan
What is a trust, do you know? It is something to set up during your final estate planning. People use it for minimizing estate taxes that can offer other benefits as part of a well-crafted estate plan. Knowing what kind of trust to incorporate into your estate plan is something to carefully consider. Learn all about their benefits in our blog this month.
Do You Know the Benefits of Including a Trust in Your Estate Plan?
A will and trust allows the proper distribution of assets. While drafting, you can determine who will receive specific parts of your property, finances, and who can control your estate. Trusts usually avoid probate. This means they avoid the legal process of proving the validity of a will. Avoiding probate saves time, court fees, and potentially reduces estate taxes.
Proper Trusts Help Protect Your Estate from Creditors
Properly constructed trusts help protect your estate from your heirs’ creditors or other beneficiaries. Some common types are Marital and bypass trusts. Marital trusts pass benefits to a surviving spouse. These are generally included in the taxable estate of the surviving spouse. A bypass trust is also known as credit shelter trust. This type bypasses the surviving spouse’s estate to make full use of any federal estate tax exemption.
Understand the Benefits of a Charitable Lead Trust
A charitable lead trust allows for certain benefits to go to a charity and the remainder to goes to your beneficiaries. A Charitable remainder trust is almost the opposite of a lead trust. It allows you to receive an income from your gift. Upon your death, any remainder goes to a charity. Trusts can even be set up to where only your grandchildren or future generations receive benefits.
Using the generation-skipping tax exemption permits grandchildren or later generations to receive assets. Visit Fidelity’s website for even more information about estate planning and trust establishments.
For more information on trusts, give Margaret Zylka House, Attorney at Law a call at (724) 628-4955. Like us on Facebook to stay up-to-date with the latest news and information. We are happy to discuss more about what is a trust.