It’s been said many times that everyone should have a will. Most people have observed first-hand the troubles encountered by the surviving spouse, child or other person simply because there was no will. The law spells out how assets will be divided when someone dies without a will, but this does not usually reflect what the decedent would have wished to happen.
Trusts are not only for the rich. They are another tool that people use to protect their families and assets, but can be used for many purposes that extend beyond the capabilities of a will. In essence, a trust is a particular type of legal ‘box’ that assets are sheltered within. The principles that guide the general operation of the trust are regulated by law, but each trust is unique, designed for a specific purpose and to benefit specific people.
There are several types of trusts.
Testamentary Trusts
Testamentary Trusts are spelled out in a will and only go into effect after the person’s death.
Living Trusts
Living Trusts fall into several types and can be either “revocable” or “irrevocable”, meaning that the terms of the trust cannot be changed. The use of a trust can allow assets to be passed to grandchildren when they reach a certain age, for example.
* Revocable living trusts are the type of trust frequently used to hold the majority of a person’s assets.
* Credit-shelter trusts (often called family trusts) are funded by an amount designated in a will, but lower than the estate-tax exemption. The rest of the estate passes to the spouse tax-free. Stipulations can be written as to how the trust funds will be used.
* Generation Skipping Trusts are normally used to pass money tax-free to grandchildren.
* Irrevocable Life Insurance Trusts removes a life insurance policy from the estate. This allows the proceeds of the policy to pay estate costs and provide tax-free income to the beneficiaries.
* Qualified Terminable Interest Property Trusts are useful when there have been divorces and remarriages. This type of
* Estate Trust in Lake County
* allows assets to go to specified relatives.
The law firm of Charles T. Newland and Associates have assisted numerous clients to protect their families with an Estate Trust in Lake County, IL. Browse their website to learn more about trusts. Contact the firm to schedule a free initial consultation.
