3 Ways Trusts Help You Control and Manage Your Legacy
A will is an important part of any Washington estate plan. However, you may have specific estate planning needs or wishes that a will does not help facilitate. A trust is another common estate planning tool that many people use when they have particular estate planning goals or objectives in mind.
According to Kiplinger, trusts have many different purposes and involve an agreement between you, the settlor, and the person you task with managing the trust, who becomes your trustee. You may decide to make a trust part of your estate plan for one of the following reasons, among many others.
1. To Reduce or Avoid Estate Taxes
If your estate is substantial, you may have to pay estate taxes. However, assets you move into a trust do not count toward the overall size of your estate. Thus, you may be able to reduce the size of your estate by placing assets into a trust – and reduce or eliminate your estate tax burden as a result.
2. To Prevent Beneficiaries from Blowing Your Money
Establishing a trust also gives you a chance to set certain parameters regarding its distributions. This may benefit you if you have beneficiaries you may not trust to spend responsibly.
3. To Protect Public Benefits Eligibility
When your beneficiaries receive certain types of government aid, they have to undergo means-testing to qualify for that aid. When you place assets into a trust for that beneficiary, they are not going to potentially make him or her ineligible for aid moving forward.
These are just a few examples of the many ways in which trusts may prove beneficial for you and your loved ones.