Trusts help to protect heirs in many very important ways. As you begin to make plans for what will happen to your assets when you are gone, you likely want to leave your money and your property to the people that you love. However, you need to consider who exactly you will be leaving money to and think about their ability to manage the money wisely. You will also need to carefully consider how the money will affect the lives of those you wish to give gifts to. You do not want an inheritance to leave someone you love unmotivated to do work or to otherwise put a loved one in a worse situation because of a gift you have given. You also do not want your heirs to lose an inheritance which you have worked so hard to provide.
In order to make sure you are doing everything possible to protect your heirs, to ensure they get the gifts you wish to give them, and to ensure that those gifts have a positive impact, you should consult with an experienced lawyer at Parman & Easterday.
Our knowledgeable legal team will provide you with the guidance you need to determine whether trusts are right for you and to understand how your loved ones can best be protected by the creation of trusts. Give us a call today to schedule a consultation and to learn more about the ways in which we can help you.
How Do Trusts Help To Protect Your Heirs?
Trusts can help to protect your heirs by making sure they do not end up losing a substantial portion of an inheritance to estate taxes. This may be especially important if you are leaving a family business behind for your loved ones to run, or if you own a farm.
The assets you have may be substantial enough to push your estate over the $5.45 million limit, which means your estate will be subject to taxes upon your death. Unfortunately, the bulk of the money and property you own may be tied up in a farm or in business assets or in other investments which cannot be easily liquidated.
If you have few liquid assets but a substantial estate, heirs could struggle to pay taxes and the farm or business could need to be sold. Your heirs might also find themselves taking out a loan, going into debt just to pay taxes on the estate. You may be able to structure ownership in trusts to minimize or avoid estate taxes on your family’s assets so you can protect your legacy. Trusts can make it possible for assets to transfer outside of probate and, with the right type of trust, the value of the assets owned by the trust should not count in determining the taxable value of your estate.
Estate taxes are not the only concern either. If you have a friend or relative who has a disability and you wish to leave money to that person, you could be putting means-tested government benefits at risk. Giving an inheritance to someone receiving Supplemental Security Income (SSI) benefits or to someone who is receiving Medicaid could result in a loss of benefits because the inheritance could put the person’s resources above countable limits.
If the person who you plan to leave money or property to is not good at managing money; is too young to manage the money; has creditors after him; or is at risk of bankruptcy or divorce, you also need to consider leaving the property in trust instead of transferring it directly. When the trust owns the assets, you can put the assets out of reach of creditors, ex-spouses, and bankruptcy courts and you can even name someone to manage the money and provide set sums for your heirs so they will not squander the inheritance all at once.
Finally, trusts can protect the value of an estate by making it easier to transfer the money and property within the trust. When you do not have to wait for a probate process to occur, the property can transfer much more quickly to its new owner. This means the new owner can take control right away, avoiding a period of uncertainty which could adversely impact the value of a business or other investments.
Getting Help With Trusts
If you are ready to create trusts in order to help protect your heirs, we are here to help. Give Parman & Easterday a call today to find out more about the assistance we can offer and the ways in which we can help you use trusts to ensure your loved ones are provided for.