Estate planning is about more than just money. One of our guiding principles is to help our clients pass on their values through estate planning solutions. An estate plan not only distributes funds to loved ones, but, if done properly, can give your loved ones guidance on how to use these funds, incentives to follow your values, and protection against creditors and others. We also strongly believe that having an estate plan is a gift in and of itself for your loved ones. It gives your family and friends a way to deal with your disability or death by letting them know your instructions on what to do. One of the best ways to accomplish this is through the creation of a revocable living trust or an irrevocable trust, which, in addition to providing tax benefits and ease of distribution, can help shape how your assets are directed and spent for years to come.
A revocable living trust is an estate planning technique to manage your assets while you are alive, take care of yourself during possible incapacity, and pass along your assets to your loved ones when you die. The trust is revocable, which means that you can change how your trust works during your lifetime.
There are many advantages to using a revocable living trust. One of the biggest advantages is providing a plan if you were to become disabled or incapacitated. With advances in modern medicine leading to longer lives, but not necessarily better quality living, incapacity planning is more important than ever to protect your finances and property.
The second advantage is that a revocable living trust allows you to give what you have, to whom you want, the way you want, and when you want. This means that you can place conditions on how the trustee can distribute trust property and for what purposes, thus avoiding the problem of having your intended beneficiaries spend the property in ways that you do not condone or anticipate. Trusts can be set up for many kinds of purposes, including:
- Educational needs
- Healthcare needs
- Charitable causes
- Needs of minor children
A third advantage is that a revocable living trust maintains privacy. Upon your death, your trust administration will remain private such that snoopy neighbors, creditors, and the general public will not know what is in your estate and/or your estate plan. By way of comparison, a will goes through probate which is a very public proceeding in the court system. In an age where public information has become a commodity, the benefits of privacy have become more and more important to our clients.
A fourth big advantage is that by placing your property in a revocable living trust, as opposed to distributing it through a will, you can also avoid the costs and delay of probate. This reduces the impact of professional fees, court costs, and taxes. Further, it ensures that your beneficiaries receive what they need as efficiently and quickly as possible.
Irrevocable trusts can provide many of the same benefits as revocable living trusts, with the additional benefits of potentially lowering your estate tax burden, providing protection from creditors, and providing important Medicaid planning benefits. The drawback is that, unlike revocable trusts, irrevocable trusts generally cannot be modified once made.
When you consult with us, we can provide you with an in-depth understanding of the relative merits and drawbacks of revocable and irrevocable trusts as they might apply to your family’s particular financial situation and guide you to the solution that best fits your family’s needs.
Plan for Tomorrow With an Experienced Estate Planning Attorney Today
The Ledbetter Law Firm, APC is dedicated to planning the futures of individuals and families through all aspects of estate planning. Contact The Ledbetter Law Firm, APC to see how you can begin creating or updating an estate plan that incorporates your current needs and desires for your family’s future.