At The Warnock Law Group we understand that many people in Lee County probably have a lot of questions when it comes to estate planning. One of the common topics we get questions about is trusts. Trusts are used for many different situations in life, but overall trusts are used to protect your assets. On of the nice things about trusts is that they can be useful for many different situations. Plus, some trusts can help you avoid going through probate and other trusts can reduce the effects of taxation.
There are many different kinds of trusts for many different needs. According to an article on Money.CNN.com, there are five standard types of trusts. They include:
- Credit-shelter trusts – this trust allows you to write a will and leave as much money to the trust as you like as long as it doesn’t exceed the estate-tax exemption.
- Generation-skipping trusts – this gives you the option to transfer money tax-free to your beneficiaries who are two generations younger than you, which is most often grandchildren.
- Qualified personal residence trust – this allows you to give away your home as a gift but you still get to maintain control of it for a certain designated time period. It also removes the value of your home from counting against your estate.
- Irrevocable trusts – these trusts are good for removing your life insurance from your taxable estate and they also give your beneficiaries cash for many reasons. They can also assist in paying for estate costs.
- Qualified terminable interest property trust – these are good for families that have experienced divorce, remarriages and/or stepchildren. Your current spouse will get income from the trust, while the rest of your heirs will receive the remainder or the principle amount when your spouse dies.
We understand that for many people figuring out which kind of trust is best and determining how to set one up can be difficult. That’s why if you have questions about trusts, including how to set them up and which trusts might be right for you, then please feel free to visit our trust page to learn more.