Laws that affect estate planning and administration are constantly evolving. It is important that you continually update your estate each year to ensure that it properly represents your interests. This includes critically reviewing any existing trusts that you may have.
Before we touch on why it is important to review your trusts in 2016, let’s establish what a trust is. A trust is formed when an individual, known as a grantor, gives a third party the rights to manage particular assets, for the purpose of passing them to a beneficiary. This third party is known as a trustee, and is generally a close family member, friend, legal advisor or financial consultant. A trust can be used to protect assets, provide financial management to a young or disabled beneficiary, or be part of a tax savings’ strategy.
The purpose of a trust can be to protect certain assets or property before they are passed to a beneficiary. This can allow the assets or property to appreciate over time, while securing them until a later time. A grantor is able to structure a trust in a way that stipulates how and when a beneficiary will be eligible to receive the assets.
Trusts can also serve as a way to protect a family or jointly owned business. When an owner feels as though the family business is threatened by family turmoil or issues among shareholders, they can set up a trust that will protect it until the trustee has come of age to acquire it, or has met predetermined terms.
Over the past few years, laws regarding taxes, estate planning and trusts have changed significantly. If you currently have a trust, it is important that you have an experienced attorney or legal advisor review it.
If you do not currently have a trust, it is never too late to speak with an experienced advisor on the best way to structure one. Our attorneys have experience with many complex trust matters such as Insurance Trusts, Family Trusts, Marital and Credit Shelter Trusts, “QTIP” Trusts, Special Needs Trusts, and Guardianships for disabled individuals. For more information on trusts and other estate planning essentials, or to schedule a review of your current trusts, contact Bodie, Attorneys at Law.