Trusts come in many shapes and sizes, and protect various aspects of people's lives. It is always best to create them early and maintain them regularly. Find out which trusts are best for you or your family.
Revocable Living Trusts
A revocable living trust is used as an efficient management tool while you are living and then for a smooth transition after your death because trust assets do not have to be probated. Probate is a public process where others can view your last will & testament and what assets went through your probate estate. For those who prefer privacy, a revocable living trust may be your solution! At Seamon Law Offices, we call a revocable living trust a “bucket.” See why.
An irrevocable trust allows you to protect assets from the high cost of long-term nursing home care by gifting assets to the irrevocable trust. Think of an irrevocable trust like a lockbox, where you choose another person to be your trustee and give that trustee the only key. This person is someone you trust, and they must follow your instructions to manage your trust. Watch this video to learn more about the “box.”
Special/Supplemental Needs Trust
If you or a loved one has a physical or mental disability, creating a supplemental needs trust (also known as a special needs trust) provides the most opportunities and flexibility. A supplemental needs trust is written so that a person with a disability can still receive certain governmental benefits like Medicaid, subsidized housing, or Supplemental Security Income, even if he or she is left an inheritance from a family member. The money in the trust is used to supplement the government benefits.
When the grantor of a trust (ie. the person who created the trust) dies, it triggers certain duties and expenses. The trustee of the trust is responsible for understanding and following through on these requirements. Fortunately, the trustee may hire an attorney to help them properly fulfill these requirements and pay the attorney with trust assets. For example, trust assets need to be secured, liabilities such as taxes must be paid, and distributions may need to be made to either the beneficiaries or sub-trust(s) for the benefit of those beneficiaries.
A retirement trust is an excellent way to protect your qualified assets for your beneficiaries. It prevents beneficiaries from cashing out accounts such as IRAs (Individual Retirement Accounts) prematurely and incurring expensive taxes, and maybe even penalties. You continue to own and control your retirement accounts while you are living, but after your death, the retirement trust can control it for you for the benefit or your heirs. The retirement trust can protect your hard-earned qualified accounts from spendthrift beneficiaries, or those who may have creditor issues, or a potential divorce.