In Advanced Estate planning, Irrevocable Trusts such as Lifetime Trusts are often used as a way to leave an inheritance to a beneficiary. There are many advantages to using Lifetime Trusts in your estate plan.
Easy to Use for Inheritances
When you leave an inheritance via a Last Will and Testament, that property must pass through the court-supervised process of probate in order to be titled in your beneficiary’s name. With a Lifetime Trust you can place the inheritance you want to leave to an heir within the Trust. Upon your death, Trust funds will be distributed to your loved one throughout his or her life.
A commonly used alternative to a Lifetime Trust is a Common Pot Trust. A Pot Trust is one single Trust used for several beneficiaries. It does not offer the flexibility that a Lifetime Trusts does. A Lifetime Trust allows you to create a Trust for each beneficiary and tailor it to the needs of that recipient.
Long-term Asset Protection
Because Lifetime Trusts are Irrevocable Trusts, they are a great form of asset protection during your lifetime and through the life of your beneficiary. Once you place items in the Trust they are safe from your future creditor claims or lawsuits as long as such actions are not already pending. And, if drafted correctly, assets within a Lifetime Trust are also safe from your beneficiaries’ creditors.
Avoid Estate Taxes
Are you looking for measures to reduce the taxes your estate will owe after your death? A Lifetime Trust is a great way to avoid some or all estate taxes. Once you place items in a Lifetime Trust, they no longer belong to you. This means they are not part of your taxable estate at the time of your death. For this reason, Lifetime Trusts are a great way to save your family from a large estate tax burden.
Larry Parman
Attorney at Law
Since founding Parman & Easterday in 1985, Larry has led over 1,000 free, community-service education programs and helped more than 10,000 Oklahoma families go from putting off their estate plan to getting it done. His goal for every client is the same: to become the person their family calls "the one who took care of everything."
Larry is the author of three books: The Straight Shooter's Guide to Estate Planning; Estate Planning Basics; and Guiding Those Left Behind in Oklahoma. He served as Oklahoma's Secretary of State and Secretary of Commerce, and his firm is the only member of the American Academy of Estate Planning Attorneys in the state.
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