Trust Attorney in Northville
There are many unique benefits in establishing a trust. For example, a properly written trust will minimize tax consequences and maximize the ease at which an individual’s final wishes are carried out. Trusts are not only useful for probate and estate planning purposes. In fact, an experienced trust attorney can help use these documents as tools for estate tax avoidance, asset protection, and more.
The estate planning lawyers at Kelly & Kelly have over 30 years’ experience in working with trusts. This includes setting up different types of trusts depending on individual needs, as well as litigation matters such as disputes among beneficiaries, issues with creditors, etc.
Trusts v.s Wills
Another well known document involved in an estate plan is a will. There are several misconceptions about wills and trusts. Most notably, that you should choose one or the other. The truth is, although wills & trusts both involve planning for the future, they serve different purposes and each provide their own unique benefits.
For example, a will provides outright gifts and have no complex provisions in creating future interests or establishing trusts. Although a will is an integral part of almost every estate plan, it alone may not adequately meet your needs. Depending on your needs and wishes, the combination of a will and trust may be the best course of action. The lawyers at our firm have decades of experience in helping clients with simple or complex estate plans and provide comprehensive guidance in selecting the most suitable plan for your needs.
Types of Trusts
Revocable Trust – A revocable trust gives the grantor the ability to revoke the trust at any time, giving them a continued right to ownership.
Irrevocable Trust – An irrevocable trust in contrast cannot be revoked, divesting the grantor of any rights to the property that they had prior to transferring it to the trust.
Domestic Asset Protection Trust – This is a powerful tool that can protect assets in the trust from the claims of creditors even if the person who creates the trust is later liable for a substantial money judgment. It can also be used to shelter assets for persons planning to marry but desiring that wealth accumulated prior to the marriage not be subject to claims from a divorcing spouse.
Special Needs Trust – A special needs trust can be created which will allow the grantor to leave assets for the benefit of a disabled individual without jeopardizing the beneficiary’s ability to receive public benefits that have strict income and asset eligibility requirements such as Supplemental Security Income and Medicaid.
Benefits of Trusts
As previously stated, there are many benefits in establishing a trust. Some of these primary benefits are listed below.
Asset Protection – One reason for using a trust may be to protect certain assets from possible creditors. Due to the fact that the grantor loses all interest in the property transferred, that property cannot be reached by creditors of the grantor. The assets must remain in the trust to provide ongoing asset protection to a beneficiary. In other words, once assets transfer to a beneficiary, those assets are no longer protected. Trusts for the lifetime of the beneficiaries provide prolonged asset protection for the trust assets.
Minimized or Reduced Taxes – Trusts help reduce estate taxes in several ways. First, they allow someone to specify gifts within the document. These gifts are not considered taxable income. Similarly, they provide the ability to make charitable donations after your passing which are considered tax write-offs. There are other tax-reducing strategies such as setting up Life Insurance Trusts. The lawyers at our firm can provide more information on choosing the right strategy in reducing estate taxes and planning for your family’s future.
Avoiding Probate – When someone dies without an estate plan in place, the court will have to utilize the process of probate to determine who inherits assets of the deceased. Furthermore, simply having a will in place is insufficient in avoiding this process. On the other hand, a trust legally names desired beneficiaries and unlike a will, a trust is extremely difficult to challenge in probate court. Overall, trusts can help minimize or avoid probate for specific assets contained within the document.