Trusts

There are different types of trusts, and each has its own rules and benefits. State laws vary significantly in the area of trusts and should be considered before making any important decision. Trusts are categorized based on their structure, validity, and type of beneficiaries. There are different reasons for choosing each type of trust, and our credible Sunset Hills trusts lawyer can help determine which is best for you.

Revocable Living Trusts

A revocable living trust is created during your lifetime and can be altered or revoked while you’re alive. You can change the beneficiaries and assets as long as you’re alive and physically and mentally able to do so. It is extremely helpful in avoiding probate litigation. Although a revocable trust may help skip the lengthy probate process, it is still subject to estate taxes.

This type of trust is flexible and can be dissolved at any time, should your intentions change. This enables the trustor to take into account any change of circumstances such as marriage, divorce, or disability. Revocable trusts automatically become irrevocable upon the death of the grantor.

Irrevocable Trusts

Once you establish an irrevocable trust, you will lose control over your assets and you can no longer change any terms or decide to dissolve the trust. You have legally removed any rights to ownership to anything you put in the trust. These trusts cannot be altered, changed, modified, or revoked once they are created.

This type of trust is usually used for tax planning and asset protection. If your main goal is to reduce the amount subject to estate taxes by removing the trust assets from your estate, then setting up an irrevocable trust can be your best option. Since the assets have been transferred to the trust, you are relieved of the tax liability on the income generated by the trust assets. If you’re thinking about establishing a trust, it is best to consult a seasoned trusts attorney in Sunset Hills to help you determine whether an irrevocable trust will work for you.

Special Needs Trusts

Special Needs Trusts, also known as the Supplemental Needs Trusts, are created for physical or mentally disabled persons under the age of 65. By establishing this type of trust, the beneficiary can obtain the benefits from the trust without jeopardizing any eligibility for United States government benefits such as Social Security, Supplemental Security Income, Medicare, or Medicaid. The assets held in the trust do not count to qualify for government assistance, as long as the beneficiary will use the money for expenses other than food and shelter.

Setting up a special needs trust for your loved one can help you enhance their quality of life and give you peace of mind. It is designed not to provide basic support, but instead to pay for comforts and luxuries that could not be paid for by public assistance funds. These trusts ensure that a beneficiary with functional needs will receive the financial support they need throughout their lifetime, even after the trustor dies.

Life Insurance Trusts

Setting up an irrevocable life insurance trust (ILIT) can help you better manage taxes and other implications of passing assets to the next generation. Once the life insurance policy is placed in the trust, the insured person no longer owns the policy. As a result, the proceeds are not counted in your estate when you die. It will be managed by the trustee on behalf of the policy beneficiaries when the insured person dies. The trustee can guarantee a young heir doesn’t squander his or her inheritance while ensuring the grantor’s wishes are followed.

Having a life insurance trust can help reduce or eliminate estate taxes. Large estates may be able to legally reduce tax liabilities with an ILIT. Since you don’t personally own the insurance, it will not be included in your estate—so estate taxes are reduced. A reliable trusts attorney in Sunset Hills MO can help you understand the benefits of a life insurance trust.

Charitable Trusts

A charitable trust allows you to set up your assets to benefit you, your beneficiaries, and a charity. This type of trust is usually established during the grantor’s lifetime and is irrevocable. It requires you to give up legal control of your assets permanently.

This type of trust can reduce your estate through charitable donation, which helps lower estate taxes. Charitable trusts can also be structured to provide a reliable income stream to you and your beneficiaries. This may be a good option if you have a desire to create a legacy with some of your assets.