Thursday, July 14, 2016

The Advantages Of Estate Planning Trusts

By Christine McDonald


Trusts are different with some taking effect while you are still alive while others are only acted upon when you die. However, they are useful in attaining goals in estate planning. The strategies can be complicated but the concept is very straightforward. Read on to know more about estate planning trusts.

It is not a decision that can be made in a spur of the moment. You need to give the matter the attention it needs. If you have children who were borne outside your current marriage then you have the responsibility to ensure that they are factored in your trust.

Financial planning skills are not in-borne. Some people are good at this while others are not. When the beneficiary does not possess the skills then you will be putting everything you have acquired in your lifetime at risk by leaving him or her without trustee. You cannot afford to commit this mistake especially if you had to go to extreme lengths in order to gain the assets.

Disabled people can only do much when it comes to management of assets. If the task is overwhelming then they can take unwise measures in looking for help. There are people who are in search for such individuals in order to exploit them. You cannot put your beneficiaries in such a compromising situation. Ensure that they have a trustworthy person to advise them and act on their behalf should the need for this arise.

The trust can be your gift to your young ones or even grandchildren. It will safeguard their future in case financial difficulties set in. Even promising children might be forced to drop out of school or settle for less than they had dreamed of due to financial constraints. The trust money is paid in small rates until the indicated age for paying lump sum is attained.

Tax has to be paid and the technicalities can be complicated. Living trusts are highly taxed but if the beneficiaries are adults then they will be taxed independently. However, the tax on testamentary trust is fixed. The scenarios might change depending on the circumstances. However, it will be a relief on your part if you do not have to handle the process on your own or leave the burden to the beneficiaries.

In case the beneficiaries die, you can name a charitable organization that will receive the proceeds. It is good to think about the less fortunate in the society because they too have needs. Helping those who are in need will bring you more joy than knowing that your bank balance is high. You should factor them when spending or making budget plans.

Probates are in charge of distribution of the properties and money left behind in case of your death when you had not made arrangements on what should happen to such in the event of you death. They rarely act according to your wishes and if you do not wish for this to happen then it is better to create trusts early enough. It is never too early for death because it cuts across all age groups, races and social classes.




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