There are many different types of trusts that an individual can create as part of their estate plan. These trusts serve a variety of purposes such as providing for the support of beneficiaries, minimizing taxes, and avoiding the costly and time-consuming probate process. Seder Law’s Estates & Trusts lawyers can discuss your estate planning goals and help you decide which types of trust may be best for you. Here, we examine some of the most common types of property that are placed in trusts.
Real estate
Real property can be placed in a trust. However, it is important to remember that you will no longer own that real estate personally, rather, the trust will, as a separate legal entity. Moving real estate into trust is a significant decision because, this may limit your control over the property. For example, irrevocable trusts cannot be revoked or modified once created.
There are different reasons individuals choose to do this. For example, by transferring assets to an irrevocable trust, you may be able to avoid counting the property as your asset when it comes time to determine your eligibility for Medicare. There are limits to the protections available, however, and you should discuss this decision with a knowledgeable attorney.
Financial assets
This broad category includes a number of bank accounts like savings, checking, and money market accounts. The main objective is generally to fund the trust so it can accomplish your goals. There are other types of financial accounts that can be placed in a trust, such as:
- Bonds
- Stock certificates
- Non-retirement brokerage and mutual fund accounts
- Annuities
- Certificates of deposit (CDs)
- Safe-deposit boxes
It is important that you speak with an attorney before deciding whether to transfer these or other financial accounts into your trust. The paperwork to do so can be complicated and you may need to take into account other considerations in creating your estate and financial plans.
Life insurance
An individual can buy a life insurance policy and transfer it to an irrevocable life insurance trust (ILIT). You may be able to minimize estate taxes by doing so. An ILIT can help you meet the goals of reducing your estate taxes and providing money to pay expenses. As a result, your beneficiaries may receive a larger distribution from your life insurance proceeds.
Valuable personal property
You may have several pieces of personal property that are worth potentially significant sums of money. Jewelry, art and coin collections, and rare cars are some examples. There may be a number of benefits to doing so, such as avoiding probate when it comes time to pass these assets to beneficiaries.
You should review all of your personal property items with an experienced attorney to decide how best to handle them upon your death or incapacity. Your lawyer will review the various types of trusts that are available and the pros and cons of each one with respect to your personal property.
Seder Law Is Ready to Handle Your Estate Planning Needs
Trusts are not just for the wealthy. They serve a variety of purposes and offer advantages to individuals at all income and property levels. Our estate planning lawyers are ready to explain how trusts work and which ones may be best for your personal and family objectives. We can also assist you as you decide which assets to transfer to your trust. Reach out and connect with our Estates & Trusts team today
There are many different types of trusts that an individual can create as part of their estate plan. These trusts serve a variety of purposes such as providing for the support of beneficiaries, minimizing taxes, and avoiding the costly and time-consuming probate process. Seder Law’s Estates & Trusts lawyers can discuss your estate planning goals and help you decide which type of trusts may be best for you. Here, we examine some of the most common types of property that are placed in trusts.