When an estate planning attorney is asked to help a client manage how the transfer of money and assets will be done, they have a lot of tools at their disposal. One solution is for counsel to put on their wills and trust lawyer hat. The goal in these situations is usually to create a small chain of events that, once triggered, transfers elements of an estate into a trust.
If that sounds complicated, that's because it is a very good idea to hire an estate planning lawyer to help you draft documents. This article explores how this process works and who is likely to be encouraged by a wills and trust attorney to use it.
Creating a Trust on Death
This is the first of two possible ways to handle the job. In this scenario, the idea is to design your will so a trust only comes into being upon your passing. Assets have to be properly transferred from the estate in the right way to ensure they don't get caught up in probate.
However, if your wills and trust lawyer does the job well, the transfer will be treated by the law as if it had happened before your passing. This is because the trust essentially comes into being right before you pass.
Using an Existing Trust
A somewhat simpler approach is to create a trust while you're alive. Assets can then either remain in the trust under certain conditions or stay in your possession for the remainder of your life. On the downside, the existence of the trust while you're still alive means you'll incur administrative costs during that time.
If you wish to transfer some items with limited powers over them, this is a good way to do it. Upon your passing, the powers contained within the trust can be modified to make things easier for the beneficiary.
Why Do It This Way?
Most people interested in this approach use it because it allows them to reduce how much ends up in the estate. This can curb the risk of probate occurring, and it may also have some tax benefits.
It's a fairly complex way to do the job, and it's most appealing to folks who already are at risk of having complex estate proceedings anyhow. That usually means high-net-worth individuals and couples, but it may also have value if you wish to transfer interests in a business or intellectual properties. For more information, reach out to an estate planning attorney near you.
Share27 May 2020
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