The goals of a particular person will often guide one as to whether a trust should be established. Though there are a number of reasons for creation of a trust, asset protection and tax considerations are often of foremost importance.
Trusts can be used for tax avoidance or reduction. Trusts can be used to avoid estate taxes for example. On the other hand, assets can be sheltered from long-term costs by placing them in trust. This is often done if one wishes to maintain control of the assets and to refrain from giving these away during one’s lifetime.
Revocable living trusts are a particularly common tool used in estate planning. A revocable living trust can allow one to direct how assets are to be handled while one is alive and even after one is deceased. These trusts can also be used in possibly reducing estate taxes. In the meantime, assets within the trust can in certain cases be kept out of the hands of creditors. Finally, conditions can be set up on these trusts in such a manner that payments can be made based upon specific terms. This could particularly be important if one wishes to leave assets for children or those with special needs.
Experienced estate planning attorneys can help in the administration of trusts. The process of such administration can be complex and burdensome. Attorneys can make certain that financial management requirements from where you live are met. Such management can also prevent mistakes being made in the way assets are distributed.
Source: postcrescent.com, “Do you need a trust? It depends on your estate planning goals,” Carissa Giebel, Nov. 2, 2013