Creating an estate plan that works can seem daunting. However, that’s what we, as estate planning attorneys, do every day. We know the laws and know how to design the right plan that works for the needs of the individual client and the client’s specific situation by walking the client through the roads of Estate Planning.
Some of the considerations we make when walking the client through the Estate Planning path is the type of trust or trusts the client may need. Next you can look at the basics of ten common trusts in an aim to provide a general understanding. There will not be a quiz at the end- it is just helpful information. All you need to do when we meet is share your goals and insight into your family and financial situation, and we will design a plan that incorporates the best planning for your situation.
- Bypass Trusts. Commonly referred to as Credit Shelter Trust, Family Trust, or B Trust, Bypass Trusts do just that: bypass the surviving spouse’s estate to take advantage of tax exclusions and provide asset protection.
- Charitable Lead Trusts. CLTs are split interest trusts which provide a stream of income to a charity of your choice for a period of years or a lifetime. Whatever’s left goes to you or your loved ones.
- Charitable Remainder Trusts. CRTs are split interest trusts which provide a stream of income to you for a period of years or a lifetime and the remainder goes to the charity of your choice.
- Special Needs Trusts. SNTs allow you to benefit someone with special needs without disqualifying them for governmental benefits. Federal laws allow special needs beneficiaries to obtain benefits from a carefully crafted trust without defeating eligibility for government benefits.
- Generation-Skipping Trusts. GST Trusts allow you to distribute your assets to your grandchildren, or even to later generations, without paying the generation-skipping tax.
- Grantor Retained Annuity Trusts. GRATs are irrevocable trusts which are used to make large financial gifts to family members while limiting estate and gift taxes.
- Irrevocable Life Insurance Trusts. ILITs are designed to exclude life insurance proceeds from the deceased’s estate for tax purposes. However, proceeds are still available to provide liquidity to pay taxes, equalize inheritances, fund buy-sell agreements, or provide an inheritance.
- Marital Trusts. Marital Trusts are designed to provide asset protection and financial benefits to a surviving spouse. Trust assets are included in his or her estate for tax purposes.
- Qualified Terminable Interest Property Trusts. QTIPs initially provide income to a surviving spouse and, upon his or her death, the remaining assets are distributed to other named beneficiaries. These are commonly used in second marriage situations and to maximize estate and generation-skipping tax exemptions and tax planning flexibility.
- Testamentary Trusts. Testamentary Trusts are created in a will. These trusts are created upon an individual’s death and are commonly used to provide for a beneficiary. They are commonly used when a beneficiary is too young, has medical or drug issues, or may be a spendthrift. Trusts also provide asset protection from lawsuits brought against the beneficiary.
There are many types of trusts available and planning options. We’ll help you select which trust or trusts, if any, are a good fit for you.
Give us a call at 305-456-7158 and we will schedule an Estate Planning Session for you or you can click Estate Planning Session to request we call you to schedule. Either way, do not wait, be protected and have peace of mind knowing you have the right estate plan.
Yahima Suarez, Esq.
Yahima Suarez, PA