Trust Planning

Aler Stallings

As you begin to plan for your estate, you may find yourself exploring trust planning. Trusts can provide a variety of benefits and help meet your goals. The first step is sitting down with an AlerStallings attorney to determine if trust planning is right for you.

Do I Need A Trust?

“It depends.” The answer is based on your goals, taxes, health, family and assets. A big misconception is that trusts are only for the wealthy. In reality, no magic amount of net worth determines when a trust makes sense. In fact, if you want to protect your home from the nursing home, then a trust could make great sense regardless of your total net worth.

What is a Trust?

A trust is a legal entity created to hold and distribute assets. It’s often compared to a legally formed company. However, unlike a company, a trust does not have ownership interests (i.e. stock or shares). The trust agreement provides the rules of when the trust starts and ends. The creator(s) are called ‘grantor(s)’ and the person in charge of completing the paperwork and handling the trust is called the ‘trustee’.

Here at AlerStallings, we can assist you with creating a trust to meet our goals. Our most common types of trusts include:

  • Family Trusts – these trusts are utilized to safely hold their assets for minor children, to organize assets and avoid probate, and in blended family situations to ensure assets transfer properly to a new spouse or other family members.
  • Bypass Trust or Credit Shelter Trust – this trust allows certain assets to bypass your spouse’s estate and can provide significant federal estate tax savings.
  • Asset Protection Trusts – the primary benefit of these trusts is to protect assets like a home, farm, or financial account from long-term care costs.

Revocable and Irrevocable Trusts

The appropriate type of trust depends on your assets and your wishes. If you’re simply looking to control distributions, minimize estate taxes, and avoid probate, a revocable trust may be a good solution. But if you also want to protect assets against long-term care costs, an irrevocable trust will be required.

Common misconceptions arise with irrevocable trusts. You can’t change anything with an irrevocable trust. The assets in the trust are locked away forever. The truth is, irrevocable trusts are a viable and common planning tool for families looking to minimize taxes, avoid probate, and control distributions, WHILE also protecting assets from long-term care costs.

We can help you determine which type of trust fits your needs, so contact us today to decide which type of trust is right for you.