A trust is a legal entity to which you transfer your assets when you are alive. After your death, the trust administers the property to your beneficiaries. You can create a trust independently, but some circumstances require you to work with a trust attorney. Below are situations where a trust attorney is paramount for a smooth process.
You'll Skip Generations in Your Trust
If you want to give property to your grandchildren or to relatives who are at least 37.5 years younger than you, you have skipped generations. When you skip your children, you avoid taxes on your property upon death. However, you invoke a Generation-Skipping Transfer Tax (GSTT) if the transfer is more than $11.7M. In such a situation, a trust attorney determines how you can avoid extreme tax.
Your Beneficiary Has Special Needs
A beneficiary with special needs requires a Special Needs Trust (SNT), which your trust attorney helps you draft. Since your beneficiary doesn't own the trust assets, they remain eligible for benefits programs with an asset limit. In addition, the SNT preserves the beneficiary's eligibility for government benefits like Medicaid.
You Are Stuck Between a Will and Trust
Sometimes you aren't sure what to include in your trust and what to put in your will. A trust lawyer explains your options in detail if you are at a crossroads. So, you decide which the best option is. Also, a trust attorney guides you if you don't know how to transfer assets into your trust legally.
Your Trust Has Conditions
Conditions in your trust explain how and when your assets will be distributed. Trust attorneys use the conditions to ensure that specific events happen when the said events affect the settlement. For example, you may prefer that your beneficiaries turn twenty-one to receive the inheritance.
You'll Owe Estate Tax
If your estate surpasses the federal estate tax exemption, which is $12.06M, you'll owe estate taxes. Also, some states have estate taxes, so check with your state to confirm whether you'll owe taxes. Finally, your trust attorney reviews your options to lessen the taxes your estate will owe in such a situation.
Your Life Insurance Amount Is High
You can fund a trust in various ways, but a life insurance policy is common. Life insurance is subject to estate tax, so a large amount attracts higher taxes. Your trust attorney creates a special trust to keep your insurance safe from being hit by the tax.
Conclusion
A living trust is a wise way to manage your assets when you are alive and ensure fair distribution of property after your death. To get the best out of your trust, a trust lawyer comes in handy to streamline all processes. Also, you avoid costly mistakes when you work with a lawyer.
Contact a trust attorney for more information.
Share15 April 2022
