Estate planning is important for everyone, but it's essential for single individuals. A single person doesn't have the inherent protections of the marital relationship, the role of certain elements in estate planning becomes even more important. One of these facets is the use of trust. How does a trust benefit single planners in particular? Here are three valuable ways.
1. Trusts Avoid Probate
The probate process to confirm a will legally be long and arduous. It also costs money from the estate. Married couples often avoid probate for large assets by using joint tenancy or joint ownership with their spouse.
If you don't have this option as a single individual, probate is more of a threat to the smooth execution of your estate. Placing them in the trust provides good management and prevents them from going through probate.
2. Trusts Avoid Conservatorships
A conservatorship is a legal tool to make financial decisions for a person who has become incapacitated in some way. This often happens when someone suffers a serious accident or life-threatening illness.
However, if you don't want your personal financial future decided through the court system nor to wait for this to be navigated, the way to avoid this problem is through trust. Living trusts name a successor trustee who seamlessly takes over management of your finances and caring for your needs if you can't. You can even use multiple trusts to arrange for different trustees to handle different decisions.
3. Trusts Avoid Some Taxes
If you've worked hard and built up a nest egg, your estate could be at risk for estate or inheritance taxes (depending on your state of residence). The correct use of multiple trusts can help reduce or avoid these taxes.
While a living revocable trust doesn't remove the assets from your overall taxable estate, irrevocable trusts can do so. If you plan to give some assets to charity upon your passing, placing them in a charitable remainder trust or similar vehicle allows you to use their value now while separating the assets from your estate. Other irrevocable trusts can sequester assets for special needs family members, business interests, or just general disbursal to beneficiaries.
Where to Start
Ready to learn more about using trusts in your estate plan? There's no better time to start than now. As a single person, your estate and your person could be at risk if you don't have a good plan in place. Begin by meeting with an experienced estate planning attorney in your state today.
Share29 October 2021
Like many other people, I admire the important tasks lawyers take on every day. I’m amazed at how knowledgeable general attorneys are about a variety of subjects. These professionals can accomplish many complicated jobs seamlessly, such as representing a client in a civil lawsuit, assisting a business with a merger, and acting on a client’s behalf in a medical malpractice lawsuit. Besides creating detailed legal briefs, they must argue their clients’ cases in court in front of a judge, jurors, and others. On this blog, I hope you will discover how crucial general attorneys are to this country’s legal system.