Blogs

Are Trusts Only For the Wealthy?

By Neel Shah, Trusts|Estates|Law posted 05-18-2015 09:29

  

A common misconception holds that living trusts are only for the very rich. The belief may stem from history; in the 16th century Britain kings often controlled their lords’ power by seizing and distributing their lands as they died; the structure of a trust allowed circumvention by deeding property to the church, with the understanding it would later revert to the proper heirs. 

By measure of the 2010 Survey Of Consumer Finances only 1.3% of Americans have received monies through a trust.

Yet, the median amount is a moderate $285,000, and with as little as $100,000 the benefits can be significant:

  1. The lengthy and slow probate process can subject funds to fees and charges amounting to between 2% and 4% of total estate value.
  2. A trust avoids probate as it is private; as a distinct separate legal entity, distributions occur without court involvement.
  3. Appointment of a trustee ensures that future decisions can be placed in effect long after the trust is created.
  4. A trust fully utilizes each person’s Unified Credit. Mandated by Congress, it will shelter, per person, just over $5 million. But, should the trust be structured with “A-B Provisions”, the death of one spouse separates the trust into two parts thus enabling the shelter from estate tax of nearly $11 million.

It is important to note that as total funds increase beyond that amount, estate taxes of up to 35% take effect. Living trusts are easy to set up, low-maintenance, and keep finances out of the public eye even after death. Consultation with an attorney specializing in estate planning can insure that your assets are protected; start a conversation with us today at[email protected]t.

0 comments
20 views

Permalink