A trusts and estates attorney in Sanford NC can explain the possibility of using more complex types of trusts. One such trust that a trusts and estates attorney in Sanford NC may recommend is that of a grantor retained annuity trust.
A grantor retained annuity trust is a special type of trust that allows the grantor to receive income from the tax while minimizing tax liability. The grantor receives annuity payments from the trust for the number of years specified in the trust. This income is derived from the interest from the assets that comprise the trust.
A grantor retained annuity trust is not for everyone. It makes the most sense to use this type of trust when the grantor’s estate would exceed the federal exclusion amount. This type of trust serves as a freeze transaction and is optimized in a low interest rate environment. The value of the gift is ultimately reduced to that of the remainder interest after the annuity income transfers.
The grantor pays the income tax that is generated from the income of the trust, similarly as if the asset would be in the name of the grantor. Therefore, the beneficiary does not have to pay any income tax for the gift. There are certain ways to maximize the use of this type of trust as a wealth transfer tool. This includes incorporating rapid appreciation during the term of the trust, optimizing gift tax valuation discounts and using cascading grantor retained annuity trusts or sequential trusts. This is accomplished when a person establishes an initial trust for a certain term. When the income is received from this trust, a second trust is established with those funds. Then, the income from both trusts are established to form a third trust. In this manner, both the assets and the income may eventually be transferred to heirs without gift tax implications.
A trusts attorney in Broadway North Carolina discusses a person’s estate plans and final wishes to determine the appropriate type of financial tools to put into place. In some instances, a trusts attorney in Broadway North Carolina may recommend a testamentary trust.
A testamentary trust is a trust that is part of your last will and testament. It provides for the distribution of the estate according to particular instructions. Testamentary trusts are ideal for individuals who do not have complicated estates and who do not want to deal with the administrative expenses related to handling a living trust.
A testamentary trust becomes effective at the time of death and provides specific instructions regarding the trust assets. In this manner, a testamentary trust allows for arrangements and conditions that could not be made through a simple will.
In many cases, a testamentary trust is established for the benefit of a minor child. It often includes life insurance proceeds. If the settlor dies, the testamentary trust allows the appointed trustee to carry out the wishes of the trust. The settlor establishes the use of trust funds and other directives within the trust document. He or she names a trustworthy individual who will carry out these duties, called the trustee.
In addition to use for minor children, testamentary trusts may also be used to provide for a relative with special needs. They can also be used for anyone who stands to inherit a large sum of money upon the settlor’s death or any other individual who may benefit from their use.
If a person dies in North Carolina without a will, his or her family may be confused about what will happen next. A trusts and estate attorney in Broadway North Carolina can explain what happens in this situation. As a trusts and estate attorney in Broadway North Carolina can explain, much of what occurs is based on the state’s laws of intestate succession.
Intestate succession means; who has the legal right to inherit when the decedent had no valid will and to what extent they stand to inherit. The inheritance is based on the estate assets at the time of death. The portion that heirs are entitled do depends on the identity of remaining survivors. For example, if the decedent had children but was unmarried at the time of death, the children inherit everything. The surviving spouse inherits everything if the decedent had no children, parents or descendants. If the decedent had one surviving child or dependent, the surviving spouse would inherit half of the real estate owned by the decedent and a portion of his or her personal property. The surviving child would inherit the remainder. If a person dies with only a spouse and parents surviving him or her, the spouse receives half of the real estate and a portion of the personal property; the parents receive the remaining half of real estate and portion of personal property.
This inheritance only includes amounts owned by the estate at the time of death. Therefore, funds in a trust are not subject to division in the manner described above. Similarly, life insurance proceeds that do not name the estate as the beneficiary are not included. A trusts and estates attorney can work with clients in order to help them avoid the unnecessary and unwanted results of intestate succession.
No two trusts are alike as a trusts and estates attorney in Sanford North Carolina can explain. Although some people may not need a trust, many can benefit from the creation of a trust as it is an effective form to protect assets and avoid probate. Some of the types of trusts a trusts and estates attorney in Sanford North Carolina may recommend include:
Living Revocable Trust
This is the most common type of trust. It involves the maker of the trust designating a trustee to hold and manage assets on the beneficiaries’ behalf in accordance with the instructions in the trust document. It can be changed at any point during the maker of the trust’s life. The maker of the trust can add and remove property from the trust as he or she sees fit. Since the trust is the owner of the property, this property does not pass through probate.
An irrevocable trust cannot be changed absent extraordinary circumstances. This type of trust establishes how the property in the trust will be managed. This type of trust is often used as a way to spend down assets or limit the beneficiary’s access to the funds, such as with Medicaid planning or veterans’ benefits planning. They may also be used for tax purposes to avoid estate taxes or to avoid life insurance being counted toward the decedent’s taxable estate.
Special Needs Trust
This type of trust provides funds for a person with a disability or other special needs. Because public benefits are usually based on a person’s financial eligibility, specific planning must be put in place in order to assist the individual with the disability without affecting his or her benefits.
Asset Protection Trust
This trust is created with the intent to protect the trust maker’s assets from bankruptcy, creditors, divorce or professional liability claims.
Estate planning involves creating a strategy for the disposition of your property after your death. Why is estate planning important? If you do not currently have a will in place, your estate assets will be passed according to North Carolina intestate succession laws upon your passing, and the result may not be what you would have expected or wanted. A wills, trusts and estates attorney in Broadway North Carolina can help you devise an effective estate plan to conserve your assets for your loved ones. Consult with a wills, trusts and estates attorney in Broadway North Carolina and start planning for the future today.
In the event that you pass away without a will, your property will pass to your next of kin according to North Carolina intestate succession laws. A surviving relative must outlive you by 120 hours in order to inherit your property under these laws. Your family members are entitled to inherit their intestate share of your property even if they are not citizens or legal aliens in the United States. If you do not have a spouse, children, grandchildren, parents, siblings, nieces, nephews, or cousins, your property will “escheat”, and pass to the state in the absence of a will stating otherwise.
Generally, only assets that you own in your name alone will pass according to intestate succession laws. However, there are some assets that directly transfer to a surviving co-owner or beneficiary, and therefore are not affected by these laws. Such assets include:
- property held in a living trust;
- life insurance proceeds;
- funds in an IRA, 401(k), or other retirement account;
- securities held in a transfer-on-death account;
- payable-on-death bank accounts; or
- property co-owned as a joint tenancy or tenancy by the entirety.
Contact a local wills, trusts and estates attorney for more information about North Carolina estate planning.
An effective estate plan begins with a will or living trust. While a will provides instructions regarding how you wish to have your property distributed upon your death, it does not avoid probate. However, a trusts attorney in Broadway North Carolina can advise you about various types of trusts that you can create which do not need to go through probate. A trusts attorney in Broadway North Carolina can help you reduce your estate taxes and ensure that your property is protected from creditors by creating a trust appropriate for your unique circumstances and wishes.
Any assets titled in your name or included in your will must go through probate before they can be distributed to your heirs. The probate process is a notorious headache. In addition to requiring the payment of legal fees, executor fees, and court costs, the process can take anywhere from six months to two years to complete. One of the reasons why trusts are often used as an estate planning tool is to avoid probate.
Trusts can also be created for specific purposes. For example, a trust can be created with assets that can be managed by the trustee of your selection until your beneficiaries reach a specific age. Or, you could create a trust that continues longer to provide for a loved one with special needs, or to protect the trust’s assets from irresponsible spending, or a beneficiaries’ creditors and/or spouses. If your health is failing, you could create a living trust in order to provide for your incapacity without interruption or unnecessary court costs. If you have a will, you could also create a revocable living trust that would transfer the remaining assets of your estate into the trust upon your death. You should consult with a wills and trusts attorney to accurately determine what would work best for you.
A living trust is a trust that is created to avoid probate and is used to safeguard financial privacy in case the owner dies or is hurt and unable to take care of things themselves in some way. Hiring a Sanford Trusts and Estates attorney is recommended when it comes to drafting a living trust. There has been debate for years over whether a Sanford NC Trusts attorney is actually needed to write up this type of trust.
The Parts of a Living Trust
You don’t need much when you are writing up a living trust.
- The name of the person creating the trust, which would be you
- The name of the person who is controlling the trust, which once again would be you
- The name of the person that will take over the trust, if something should happen to you
- Names of the people who will benefit from the trust and who will take care of the trust for young children
All of this is relatively easy to do and only requires a simple template. However, if you feel that you will have issues with the estate planning or relatives that may give you a problem, it is best to hire a reputable trusts attorney to handle the situation.
Often there are issues in estate planning that aren’t covered by a basic living trust. In these cases, you will want to hire a lawyer to advice you on the estate and the living trust as well.
These are just a few of the reasons that you might need to hire a lawyer to help work out your living trust. It is possible to do it yourself; however, sometimes it is better to have legal counsel instead.
It used to be that you needed to have a Rockefeller last name to even consider needing a trust, but times have changed. These days, more and more people look to establishing trusts in lieu of having a will when planning their legacies.
The expenses associated with establishing a trust can be significant so a good rule of thumb to follow is that if you have at least $100,000 and have significant assets in real estate, a trust can be a great idea. Trusts also have the benefit of being flexible and varied and can minimize estate taxes while at the same time protecting your estate from lawsuits and creditors.
Another major benefit of establishing a living trust is bypassing the time and cost of probate—that costly process of administering your estate that costs thousands of dollars and can take years to finalize.
In many U. S. states, you are able to name beneficiaries to a living trust to avoid probate and establish them as “payable on death,” ensuring that your loved ones will receive their inheritance just as they would under a legal will but without the increased risk of disputes and lawsuits.
Working with an expert trust lawyer, be sure you take as many steps as possible to avoid probate—establishing up-to-date beneficiaries and establishing durable financial power of attorney in the event that you’re incapacitated for any reason and unable to make important decisions related to your estate.
If you think a trust is a good idea for your family and estate, be sure to find a qualified Sanford trust attorney to help you through the process. No matter which way you go when planning your estate, maintain regular contact with your trust attorney to make sure your estate is protected.
You have worked hard all of your life for what you have and the last thing you want to see happen to your belongings after you pass is go into probate. Protecting your assets should be a part of your estate plan. You could end up costing your family a lot of time, money, and stress if you do not protect your estate with a trust before your passing. You definitely do not want to see your family suffer any more than they have to. This is why it is so important to speak with your Broadway trusts and estates attorney about your estate plan.
When you do not have a trust protecting your estate, the property goes to probate court. It can be held here for years while the courts decide how to handle it. Your family may never see the estate again after your passing if it is not handled properly. Sending your family to court after your passing is probably not on your agenda. This is why working with a Broadway trusts and estates attorney is so important in securing your estate to be passed on.
Not only could you be costing your family a lot of time in court, you could also be costing them a lot of money as well. Having a trust in place before your passing can solve all the headaches of not having to go to probate court. You want to ensure a smooth transaction of your estate and the only way to do this is by setting up a trust that clearly spells out how it should be handled. A Broadway trusts and estates attorney is your best source for helping you create a trust that will protect both you and your family.