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Around the Web: Now is the time to act before changes affect federal estate and gift tax!

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Federal estate and gift tax exemption was increased in 2017 from $5.49 million per person to $11.18 million. This was a huge increase in what taxpayers were allowed to transfer without triggering taxes. With adjustments for inflation, the exemption is at $13.61 million for individuals and $27 million for couples. However these changes will expire at the end of 2025 and decrease by half unless Congress steps in. This article explains why this could heavily impact your estate plan. 

 

These possible changes should prompt everyone to reevaluate their estate plans – especially if you took advantage of this increased exemption. Now is the time to assess your circumstances and make any necessary changes. Contact Rhodes Law Firm today to learn more.

Estate Planning: 9 Benefits of Planning for Your Children

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As you sit in your favorite armchair, sipping a cup of coffee and flipping through old photo albums, your mind drifts to the future. What legacy will you leave for your children?

Estate planning may not be the most fun topic, but its significance cannot be overstated.

Let’s go through the benefits of planning for your children when it comes to estate planning.

1. Financial Security

Financial security is a crucial aspect of estate planning, especially when it comes to providing for your children’s future.

Estate planning allows you to set aside funds specifically for your children’s education expenses. That ensures they have the financial resources to work towards a higher education without being stuck with student loans.

A good lawyer can help you explore the different types of trusts available for your needs.

In the unfortunate event of your untimely death, estate planning can include life insurance policies or other mechanisms to replace lost income. That helps ensure that your children’s financial needs are met even without your earning capacity.

2. Preserve Your Legacy

Estate planning allows you to articulate your values, beliefs, and life lessons to your children. That’s done through distribution of assets, charitable giving, and other provisions, ensuring that your legacy lives on through them.

It can involve bequeathing family heirlooms, artifacts, and other items of cultural or historical significance to your children. That preserves your family’s heritage for future generations to cherish and appreciate.

Adding charitable giving into your estate plan can instill a spirit of philanthropy in your children. That teaches them the importance of giving back to the greater Georgia community and making an impact on the world, even if your children are adults.

3. Guardianship

You can also protect your young children’s day-to-day life through estate planning. It allows you to choose a guardian for your underage children in the event of your incapacity or death.

This ensures that someone you really trust will be responsible for their parenting and upbringing. That provides them with stability and protection during a difficult time.

Estate planning enables you to select a guardian who shares your values, beliefs, and parenting style, ensuring that your children are raised in an environment that aligns with your wishes and provides continuity in their upbringing.

4. Reduce Family Conflict

Estate planning allows you to clearly outline your wishes about asset distribution and other major decisions concerning your children.

This transparency can help prevent misunderstandings and disagreements among family members by ensuring everyone knows your intentions.

By creating an equitable estate plan that treats each child fairly, you can reduce the likelihood of resentment or disputes among siblings. Clearly defining how assets will be divided can help prevent perceptions of favoritism or inequality.

In cases where certain family members are chosen for specific roles, such as executor, trustee, or guardian, estate planning allows you to provide explanations for your decisions. This transparency can help prevent feelings of resentment or suspicion among family members.

5. Avoid Probate

No one wants to end up dealing with an estate in probate.

Probate can be a time-consuming process, delaying the distribution of assets to beneficiaries. By creating a comprehensive estate plan that utilizes tools such as trusts, joint ownership, and beneficiary designations, you can ensure a smooth and efficient transfer of assets to your children without the need for probate.

Estate planning lets you choose how your assets should be divided among your children, bypassing the default rules of intestate succession imposed by probate. This flexibility enables you to tailor your plan to meet the unique needs and circumstances of your family members.

6. Business Succession

If you own a family business, you’ll definitely want to have an estate plan.

It allows you to ensure the smooth transition of ownership and management of the family business to your children. By clearly outlining your wishes and intentions, you can maintain operations continuity and preserve the legacy of the business for future generations.

In your estate plan, you can outline provisions for the training and development of your children to prepare them for leadership roles within the business.

This may include mentorship programs, educational opportunities, or hands-on experience to help them acquire the skills and knowledge needed to manage the business effectively.

7. Divorce or Lawsuit Protection

Estate planning allows you to shield your children’s inheritances from potential creditors. That includes ex-spouses in the event of divorce or litigants in the event of lawsuits. By utilizing trusts or other protective mechanisms, you can ensure that your assets remain within the family and are not subject to division or seizure.

If you have children with special needs, substance abuse issues, or other vulnerabilities, estate planning allows you to establish trusts or other arrangements that protect their inheritances from potential threats.

This ensures that they receive the support and care they need without being placed at risk in the event of divorce or legal action.

8. Community Impact

Advance planning allows you to allocate funds or assets to charitable organizations and causes within your community that align with your values and priorities.

By including provisions for charitable giving in your estate plan, you can make a positive impact on the issues and organizations that matter most to you and your family.

9. Peace of Mind

Making sure your estate is planned for is helpful for your entire family’s peace of mind.

Involving your children in the estate planning process and educating them about financial matters can empower them to make informed decisions in the future.

Knowing that your children are equipped to handle their inheritance responsibly can offer peace of mind as you plan for their future.

By taking the time to create a comprehensive estate plan that prioritizes your children’s well-being, you are demonstrating your care and responsibility as a parent. Knowing that you have taken steps to provide for your children’s future can bring peace of mind and a sense of fulfillment.

Planning for Your Children: Start Today

There are a lot of reasons you should integrate planning for your children into your estate planning.

Do you want some help with your estate planning? Rhodes Law Firm, PC  has been dedicated to helping Georgia locals like you for over 40 years.

Contact us today to learn more about our services.

Around the Web: Estate Planning is Essential in Agriculture Industry

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Farmers face many challenges on a daily basis, however the greatest of them all may just be ensuring the preservation of their land. By having a proper estate plan in place, you can help prevent your cherished farmland from being lost. This article highlights a few misconceptions about estate planning that may negatively impact your farmland in the long run.

Oftentimes, farmers can fall victim to the idea that a legal will is unnecessary as the family will know how to divide the assets. However, the article states that without a valid will in place, the state ultimately holds the authority to allocate the assets regardless of the decedent’s wishes.

Another common misconception is that once a will is created, estate planning is complete. With all of the changes that can occur over the years – from tax laws to familial relationships – it is crucial to routinely update your estate plan.

In addition, many believe that equal division of assets is the best way to settle their estate. This is not the case across the board. It’s important to take into consideration who is involved with the farm and who is not. If equal shares are distributed among everyone, the future of the farm could be jeopardized.

If you are ready to discuss an estate plan for your farm or have any questions, give Rhodes Law Firm a call today.

How To Prepare for Death Well Before the Time Comes

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How to prepare for death is a topic often avoided, yet it’s a crucial aspect of responsible financial planning. Surprisingly, two-thirds of Americans have no estate plan in place, leaving their loved ones vulnerable to a financial quagmire upon their passing.

Without a clear plan in motion, assets may be distributed haphazardly. This can lead to disputes and unnecessary stress for grieving family members. However, by addressing this uncomfortable reality head-on and taking proactive steps to organize finances, individuals can ensure that their legacy is preserved and their loved ones are provided for in their absence.

In this blog post, your expert team at Rhodes Law Firm will highlight the key steps you should take to ensure you are prepared for your passing, well before the time comes. Ready? Let’s get started.

Create a Will

Creating a will is the cornerstone of preparing for death from a financial perspective. It’s akin to crafting a blueprint for the distribution of your assets and the care of your loved ones after you’re gone.

With a will in place, you gain the power to dictate who inherits what, whether it’s your savings, property, or sentimental possessions. Additionally, you can designate guardians for any minor children, ensuring they’re cared for according to your wishes.

Fortunately, the process of making a will doesn’t need to be daunting. Seeking professional assistance from a lawyer can provide peace of mind, especially if you have significant assets or complex family dynamics.

However, even a simple will, written with clarity and witnessed properly, can serve as a legally binding document to protect your interests and provide clarity for your loved ones during a difficult time.

Establish a Trust

Establishing a trust is another vital step in preparing for death from a financial standpoint. Think of it as creating a secure container to hold your assets and distribute them according to your wishes.

Unlike a will, which becomes effective only after your passing, a trust can take effect during your lifetime or after, providing flexibility in managing your affairs and ensuring your loved ones are taken care of.

Setting up a trust allows you to avoid probate, the legal process of validating a will, which can be time-consuming and costly. By transferring assets into a trust, you can streamline the distribution process and maintain privacy, as trust documents typically remain confidential.

Moreover, trusts offer greater control over how and when your assets are distributed, allowing you to specify conditions or restrictions to protect beneficiaries and preserve your legacy. Consulting with a legal professional can help you navigate the complexities of trust creation and ensure your wishes are accurately reflected in the trust document.

Designate Beneficiaries

Designating beneficiaries is an essential part of preparing for death financially. It’s a straightforward process of specifying who will receive your assets after you pass away.

This step is particularly crucial for accounts like retirement plans and life insurance policies, where you have the option to name beneficiaries directly. By doing so, you ensure that these assets transfer directly to your chosen recipients, bypassing the potentially lengthy and costly probate process.

Updating your beneficiary designations regularly is key, especially when significant life events occur, such as marriage, divorce, or the birth of children. By keeping your beneficiaries current, you ensure that your assets go to the intended recipients. This avoids any confusion or disputes among family members.

Plan for Taxes

Death and taxes may be inevitable, but with proper planning, you can minimize the tax burden on your estate. When it comes to preparing for death from a financial perspective, understanding and planning for taxes is crucial.

By working with a financial advisor or tax professional, you can assess the potential tax implications of your estate plan and explore strategies to mitigate them. From gifting assets during your lifetime to setting up trusts, there are various options available to help reduce estate taxes and preserve your wealth for future generations.

Taking proactive steps to plan for taxes can significantly impact the amount of assets that ultimately pass on to your beneficiaries. By strategically managing your estate, you can maximize the value of your legacy and ensure that your loved ones are well provided for after you’re gone.

Consider Long-Term Care Planning

Long-term care planning is another crucial aspect of preparing for death from a financial perspective. As we age, the possibility of needing assistance with daily activities increases, and long-term care costs can quickly deplete savings if not adequately planned for.

By taking proactive steps to address potential long-term care needs, individuals can protect their assets and ensure they receive the care they deserve in their later years.

Exploring options such as long-term care insurance or setting aside funds specifically for future care needs can provide peace of mind and financial security. Planning for long-term care also involves evaluating different care options and discussing preferences with loved ones.

Communicate Your Wishes

Finally, don’t underestimate the power of communication when preparing for death from a financial standpoint. Openly discussing your end-of-life wishes and estate plans with your loved ones can provide clarity and guidance during a challenging time.

By sharing your intentions regarding asset distribution, funeral plans, and other important matters, you can prevent misunderstandings and conflicts among family members.

Having these conversations may feel uncomfortable. However, they are essential for ensuring that your final wishes are understood and respected. By openly communicating your desires, you can alleviate potential stress and uncertainty for your loved ones and ensure that your legacy is carried out according to your wishes.

How To Prepare for Death

Preparing for death may not be a pleasant topic, but it’s a necessary one. By taking simple steps to organize your finances and communicate your wishes, you can ensure a smoother transition for your loved ones when the time comes.

If you are interested in learning more about how to prepare for death from a financial standpoint, speak to us. Here at Rhodes Law Firm, state planning, wills, trusts, long-term care planning, and more. Click here to contact our experienced professionals.

Around the Web: Don’t Overlook the Importance of Title Insurance

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If you’re in the process of buying a home, the costs can add up quickly. If you’ve ever thought about avoiding title insurance, this article from The Ascent explains why that may not be in your best interest. 

 

Title insurance can help protect you against any competing claims or liens on the property, and help  prevent you from inheriting any unforeseen issues with the ownership of the property. The author of the Ascent article noted she was lucky to have title insurance on her pending home purchase as the home had been foreclosed upon and the previous owner had filed a lawsuit to get it back. 

 

Without title insurance, she could have been out a lot of money or been stuck fighting in court to keep the home. A home is a very expensive investment. You never know what might happen, and it’s not worth taking the risk when it comes to your ownership rights. 

 

Make sure you add title insurance into your home-buying budget and be confident in your investment. Contact Rhodes Law Firm today with any questions you may have about the process.

Navigating Estate Planning in Second Marriages: Tips and Strategies

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Those with children from prior relationships must consider the impact of 2nd marriages on their children’s ability to inherit. About 50% of adults remarry within five years of a divorce, with 18% of blended families having at least one stepchild. Measures also reduce impact if you fall into the 60% category of failed second marriages.

Regardless of the positive attitude of your new spouse toward children from a prior relationship, planning for/protecting your children is a priority. Once a parent dies, if the entire estate goes to their new spouse, that person has total power over the assets. This may result in children being disinherited.

We will share tips on protecting your children and their inheritance, whether they are six or 60 when you remarry.

Update Beneficiaries

Numerous financial accounts require designating a beneficiary to receive the assets upon death. The primary beneficiary gets all funds in the account. If there is more than one primary, all primaries receive equal amounts.

Contingent beneficiaries receive funds only if the primary beneficiaries predecease them. You may designate your children as primary beneficiaries and your second spouse as a contingent beneficiary or vice versa.

After a divorce or becoming widowed, check all accounts to determine who you have as a beneficiary of the account. If you remarry, having the proceeds of all or most of these accounts go to your children is one way to secure an inheritance.

  • Life Insurance
  • Pension
  • 401(k), IRA or other retirement accounts
  • Existing wills and trusts

Verify who you have as your durable power of attorney, the person on your health care proxy, and your safety deposit box. You don’t want your ex-wife in charge of live-or-die healthcare decisions while your second wife has no legal say in the matter.

Any legal or financial document that designates a person’s decision-making power or specifies beneficiaries must be adhered to, even if you have divorced that person.

Prenuptial and Postnuptial Agreements

These contracts determine the division of assets following a divorce or death. They specify the holdings of each person and the distribution of assets when the marriage ends.

Marital contracts ensure an equitable inheritance for both parties and children of prior relationships. You should discuss the advantages and disadvantages of having a marital contract as part of your estate planning packet with your estate planning attorney.

A prenuptial agreement must pass a three-part test pursuant to Scherer v Scherer249 Ga.635 (1982) to be enforceable:

  • Proof that creation is not the result of duress, fraud, misrepresentation, mistake, or nondisclosure of material facts
  • The prenup is not unconscionable
  • That enforcement is not unfair or unreasonable

Anyone seeking to enforce the terms of a prenuptial agreement must prove the above. Failure to disclose assets or yearly income may fall under nondisclosure of material facts.

A postnuptial agreement is for people already married when they realize the need to protect assets. They may be necessary in a second or subsequent marriage to secure an inheritance for their children.

Postnuptial agreements must meet the same criteria as prenuptial agreements when seeking enforcement in Georgia. A full disclosure of assets is crucial to ensuring validity.

Wills/Trusts in 2nd Marriages

The individual assets each person brings into the marriage determine the best estate plan.

A will provides instructions for distributing assets after you die. This includes real property, personal property, and guardians for minor children.

Stepchildren do not have any legal inheritance rights to your estate, but your spouse does. Georgia law states that a surviving spouse may receive at least one-third of an estate; the remaining assets go to your children.

If the probate court accepts your will, your spouse receives what you designate in the will. You may leave your spouse out of your will, but they can request the court award them up to twelve months of support.

The Georgia intestate succession rules apply if you don’t have a will. This may leave your children less inheritance than you intend.

The standard probate process in Georgia is governed by Title 53, Chapter 5.  A will becomes a public record, meaning anyone can visit the courthouse where the will is on file, pay a fee, and obtain a copy. The way to avoid having your assets become public records is to place them in a trust.

Trusts

A trust avoids probate and keeps your assets private. The type of trust you need depends on individual circumstances.

marital trust transfers all assets to your surviving spouse as the sole beneficiary of your estate. This secures your spouse’s future but may leave your children with zero inheritance.

family trust allows you to designate the distribution of your assets among your surviving spouse, children, and any other beneficiaries you choose. You may also specify percentage allotments and the ages your children need to be before receiving their inheritance.

When appointing a trustee, many select their new spouse. If they do not have a strong, positive relationship with your children, this can create problems.

Select someone you can trust to act in the best interests of your children. If you are unsure of your selection, ask your attorney for suggestions or if they are willing to serve in this capacity.

The laws governing the validity of a trust are in §53-12-4 of the Georgia Code. While there are do-it-yourself wills and trusts available online, ensuring that your estate plan is valid is essential.

Estate Planning Is Tricky

Second marriages increase the importance of careful estate planning and the benefits of hiring an estate planning attorney. They will review your and your spouse’s financial holdings, offering options that protect both parties and their children.

Factors include children from prior relationships, your current spouse, children born of the second marriage, and any prenuptial agreements. You may have established businesses, significant retirement investments, real estate, significant debt, family heirlooms, or other items of value.

Hire an Estate Planning Attorney

Hiring an estate planning attorney ensures you have a legally binding estate plan. Rhodes Law Firm, PC has 35 years of experience, providing guidance in setting up your estate to reduce conflict risks and emotional distress of surviving family members.

Review these examples of why estate planning is crucial in 2nd marriages, then call (706) 724-0405 to schedule an estate planning consultation.

Around the Web: Estate Plans for Small Business Owners – What You Need to Know

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Small business owners should ensure they maximize the value of their business, not only for themselves but for their heirs. This article lists a few helpful things to consider to help you make the most of a significant portion of your estate. 

 

Planning your exit strategy is crucial for business owners, as it can help maximize the value realized from the business and add value to your overall estate. Whether you plan to sell your business to an outside party or set up a succession plan, an effective strategy will realize the full value of your business. 

 

Business owners should also have necessary estate planning documents in place. These may include a will, a power of attorney, and a medical power of attorney. A will can help lay out any wishes involving your assets, including your business. A power of attorney can help keep your business running smoothly if you are incapacitated for any reason. 

 

There are also a number of trusts that business owners can use to their advantage. These can also help keep the business running if the owner becomes incapacitated or dies. Some benefits include avoiding probate, keeping the business safe from creditors, and minimizing taxes during the transfer in a succession plan.

 

If you need more information or help creating an estate plan as a small business owner, contact Rhodes Law Firm today.

Around the Web: Revocable or Irrevocable Beneficiary – Which is right for you?

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While planning your estate, it is important to know the two types of beneficiaries and their differences. This helpful article helps illustrate their major differences as well as their pros and cons. Revocable beneficiaries can be changed without the beneficiary’s knowledge or consent at any time. The owner of the account has full control over the assets and has the flexibility to change the beneficiary as circumstances evolve.

 

Irrevocable beneficiaries cannot be changed without the beneficiary’s written consent and gives certain legal rights to the beneficiary. This is a much more permanent designation than a revocable beneficiary. 

 

Which type is right for you? It can vary depending on a number of factors. While there are numerous advantages of revocable beneficiaries, they don’t come without some limitations. For example, if you don’t remember to update your designations if circumstances change, such as divorce, you may face negative consequences. 

 

A seasoned family planning attorney can help you navigate which is right for you and help you make the best decision for your family. Contact Rhodes Law Firm today to learn more!

What Are the Best Estate Tax Planning Strategies?

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Who will carry on your legacy? It’s a question that resonates deeply for those with assets and loved ones to protect. In the world of estate tax planning strategies, knowledge is more than just power; it’s a legacy safeguard.

Whether you’re navigating the intricacies of wills and trusts or considering the impact of a second marriage on your estate, the stakes are high and the rules, complex. Here, we unravel the often-overlooked estate tax planning strategies that could be the difference between a well-preserved legacy and an opportunity lost. Read on to discover how you can protect not just your assets, but the future of those you cherish most.

Utilizing Revocable Living Trusts

Revocable Living Trusts are becoming increasingly popular in estate planning due to their flexibility and control advantages. Unlike irrevocable trusts, they can be modified during your lifetime to allow you to own and manage assets within the trust.

A key benefit is avoiding the time and expense of probating assets upon death. Especially important if you own real estate in multiple states. These trusts also:

  • Provide more efficient estate administration
  • Minimize emotional stress for your family
  • Ensure privacy by avoiding public court processes

Revocable Living Trusts are particularly effective in preventing court interference after death or incapacity. They ensure equitable asset distribution and provide prenuptial protection.

Importantly, they can protect assets from beneficiaries’ creditors and from being impacted by divorce proceedings. Unlike a will, a living trust is more difficult to contest. They ensure minor children are not directly handed their inheritance and can include tax planning to reduce or eliminate estate taxes.

While initially more expensive than a will, a living trust covers both living and post-death issues, potentially saving costs in the long run.

Gift Tax Strategies

Gift tax strategies are crucial for estate tax planning. One effective method is to utilize the annual gift tax exclusion. This allows you to give a certain amount per recipient each year without incurring gift tax.

This strategy can significantly reduce the size of your taxable estate over time. It’s important to note that the rules for what constitutes a gift can be complex, and improper gifting can unintentionally trigger tax consequences.

For example, paying for someone’s tuition or medical expenses directly to the institution can be exempt from gift tax. Additionally, larger gifts can be planned to coincide with significant life events, like marriages or the birth of a child.

Understanding the nuances of these rules and strategically planning gifts can play a pivotal role in minimizing estate taxes and maximizing the inheritance for your beneficiaries.

Charitable Contributions and Trusts

Charitable estate planning allows you to leave a legacy that goes beyond financial wealth. It’s an opportunity to impact causes you care about, like education or healthcare.

It’s not just about donating money. Appreciated assets, life insurance policies, or even endowments can be used. This kind of planning ensures that your values and beliefs continue to make a difference even after you’re gone.

One of the major benefits of including charitable giving in your estate plan is the potential tax benefits. Not only can these contributions reduce your estate’s tax liability during your lifetime, but they can also offer estate tax advantages.

For instance, giving appreciated stock to a charity can help you avoid capital gains tax, and making a bequest in your will or trust can also bring tax benefits. These tax advantages can optimize your financial position and fulfill your charitable intentions simultaneously.

Family Limited Partnerships (FLPs)

FLPs are strategic tools for estate tax planning, especially in the context of preserving family wealth and reducing estate taxes. They involve transferring business interests or assets to family members, often at a reduced tax cost.

FLPs allow the transfer of business interests or assets to family members in a tax-efficient manner. By doing so, you can reduce the overall value of your estate, which in turn can lower potential estate taxes.

This strategy is particularly effective for those who wish to keep their family business within the family while also managing their estate tax exposure.

FLPs offer a way to maintain some control over the assets or business while transferring them to the next generation. This control is balanced with the tax benefits that come from reducing the value of your taxable estate. It’s a way of ensuring that your family retains the wealth you’ve accumulated, without the heavy burden of estate taxes.

Life Insurance Trusts

Irrevocable Life Insurance Trusts (ILITs) offer benefits like estate tax reduction and asset protection. When you establish an ILIT, you transfer the ownership of a life insurance policy into the trust. This strategic move separates the policy’s value from your taxable estate, which can lead to substantial estate tax savings.

One of the pivotal advantages of an ILIT is its ability to protect the policy proceeds from creditors, lawsuits, and even complications arising from 2nd marriages. This feature ensures that the benefits of the life insurance policy are reserved exclusively for the beneficiaries you designate, thus effectively planning for your children and protecting your children’s future financial security.

An ILIT also allows you to maintain control over how the policy proceeds will be distributed among your beneficiaries. This aspect is particularly beneficial in complex family dynamics, where specific terms might need to be set for different family members.

In addition to this, ILITs offer the convenience of bypassing the probate process. They enable a quicker and more cost-effective transfer of assets to your beneficiaries.

However, it’s important to consider that once an ILIT is established, it becomes irrevocable. This means you cannot amend or cancel the trust, which requires careful consideration before setting it up. Additionally, the management of the trust may involve certain costs.

Tailored Estate Tax Planning Strategies for Lifelong Peace of Mind

Estate planning is a journey that requires foresight and expert navigation. At Rhodes Law Firm, PC, we specialize in crafting estate tax planning strategies that resonate with your unique life story and goals. We understand that your legacy is not just about assets; it’s about the future and well-being of your loved ones.

To ensure your estate plan mirrors your intentions and secures your legacy, schedule an appointment with us. Let’s collaborate to protect what matters most to you.

What are the Different Types of Trusts?

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Did you know that 67% of Americans don’t have trusts or estate plans? This means your assets and loved ones are left unprotected after you pass away. To help make sure this doesn’t happen to you or your family, we’ve rounded up everything you need to know about estate planning, durable power of attorney, and more.

In this article, we will discuss the most common types of trusts and how they help in planning for/protecting your children. We’ll also explain why it’s important to talk with an estate planning attorney. Let’s jump in and see which type of trust makes sense for you and your family.

What is a Trust?

Trusts are tools designed to help you manage your assets and protect them for your beneficiaries. There are different types of trusts that can be used with different goals in mind. A trust is a contract between the person who creates it, the one who controls it, and the beneficiaries.

The Grantor is the person who creates the trust. The Trustee is the one who controls it, and the beneficiaries are the ones who are entitled to the benefits of the trust. This is often a spouse, children, or grandchildren.

Trusts are also used to handle plans for a business after the owner passes. Businesses, assets, property, and more all come with a plan for your partners and family members.

Benefits of a Trust

The benefits of a trust are almost endless. Without one, this leaves your assets unprotected after your death. Your assets, children, or grandchildren are left confused, unprotected, and without a plan.

A trust gives you asset protection, planning for a child with special needs, and asset management in the case of young children or those who aren’t equipped to handle money. In a 2nd marriage, you can also protect assets after your death.

A trust will also give you privacy. Without a trust, your affairs are open to the public in probate. This allows for no court intervention, and your trust is handled by your trustee. You get to lay out all your wishes after your passing or a disability.

Revocable Trust or a Living Trust

A revocable trust is a legal entity that you create and control. You can change the terms of your trust at any time, making it ideal for people who want to keep their finances private. A revocable trust is also known as a living trust.

A revocable trust allows you to name someone else as trustee. The trustee is the person who manages the assets. You can also have a co-trustee alongside another person.

A revocable trust is also used in some cases as a will substitute. This keeps you in total control over your assets while you’re living. After your death, you would have given instructions for your assets and beneficiaries.

What is an Irrevocable Trust?

An irrevocable trust is one that cannot be changed once it’s been set up. This means that you can’t remove assets from the trust or change any of its terms, such as who will receive distributions and how much they’ll receive. Speak with your attorney to determine which trust works best for you.

You might use an irrevocable trust if you want to provide lifelong support for your children or grandchildren. This is a great option if you don’t want them to have access to their inheritance until they reach a certain age.

You could also use an irrevocable trust if there’s a possibility that someone might try to take advantage of your generosity by asking for money early on in life. This happens during a divorce, job loss, or if another child faces an emergency.

The Difference Between a Trust and a Last Will and Testament

Without a will, your assets get distributed according to state regulations. In this case, your loved ones won’t always receive your assets. If you have certain assets that are in your name alone, those assets may pass to your loved ones after your death when you leave a will.

You always want to use an attorney to make sure your will is written correctly. Protect the ones you love by creating a trust within your will. This protects them from tax liabilities and creditors. A written will gives you and your family protection and makes your wishes known.

Unlike with a trust, your will goes through probate. This process uses the court to divide your assets and property. This saves your family a lot of time and money wasted in court.

Why Do You Need a Trust?

One of the biggest benefits of using a trust is to avoid probate. When you pass away, your estate will be subject to probate court before it gets distributed to your heirs. Probate is a long and costly process that involves court hearings, attorney fees, and other expenses.

Without a trust, there’s no guarantee that all of your assets have protection during this probate time period. By contrast, when you leave an asset in trust for beneficiaries, the trust avoids probate because it’s considered private property.

A trust also keeps your assets protected from creditors or lawsuits against you. The trust also protects the beneficiary’s ability to manage their inheritance. You can pass assets without tax implications on death, which is a huge money saver for your loved ones.

Hire a Trusts Expert Today and Protect Your Family and Assets

Deciding what to do with your assets after your passing is a big decision. If you want to learn more about the different types of trusts, contact us today. We are here to answer any questions you may have and help you make the right decision for your situation.

You don’t have to go through this process alone. Let our experts help with trusts, wills, power of attorney, and more. Make a plan for when the unimaginable happens.

Fill out the contact form here to get in touch with a local trust attorney at Rhodes Law Firm, PC. Don’t put off this important life milestone any longer.