Estate planning seems intimidating at first. It can be difficult for some of us to even think about planning for death or illness. However, it is important for you and your family to have a plan. Having a strong plan brings peace of mind to you and relieves stress for those you leave behind. We are here to help you start.
We find it is best to begin by familiarizing yourself with the basic terms and what they mean.
A trust is a great way to ensure you are able to take care of your loved ones. It is important for all people with a family to have an estate plan, and a trust can be a valuable tool for many.
First things first: know your trusts!
When it comes to trusts, know that you have options. The first choice you must make is whether you want to open a revocable trust or an irrevocable one. We’re here to help you decide.
Let’s learn the difference.
Irrevocable: a trust that cannot be modified, amended or terminated without the beneficiary’s (or “heir’s) permission. Once assets are in this type of trust, you won’t be able to change the terms. In other words, you are relinquishing all rights of ownership to the assets in the trust.
Why would you choose this option over its flexible counterpart? Well, an irrevocable trust comes with its own set of benefits.
This trust protects the assets you have worked a lifetime to acquire. Creditors and lawsuits will have a more difficult time accessing your assets if they are in an irrevocable trust.
Revocable: the provisions in a revocable trust can be altered or cancelled by the trust maker. The individual who puts the money into the trust can change the trust as he/she pleases. The money is still distributed and controlled by you, the settlor, and the assets transfer to the beneficiaries only after death.
1. You maintain control of the assets in the trust
2. If you become incapable of managing your affairs, the designated trustee steps in to handle the assets. The trust can even set forth specific steps and guidelines that the successor trustee must carry out.
Now that you’re knowledgeable about your options, which seems to be the best fit for you? If you are still unsure, the attorneys at Holloway and Kimberlin, LLP are always happy to help you and your loved ones come up with a plan that works best for you. Call us today and we can discuss if a trust is right for you.