Do I Need a Minimum Amount of Assets? Advice from an Estate Planning Attorney
Do you want to start your own trust fund? First, you must decide whether a living trust, a charitable trust, or any other form of a trust fund benefits you. Sometimes we take for granted that a trust will benefit us. We hear about the tax benefits of trust funds all the time, so they must be great financial decisions, right? Well, not always.
The success of a trust depends on the estate to which it is applied. Not all estates, in fact, most estates, don’t need a trust fund associated with them. The following ideas are simply guidelines. You should always let an estate planning attorney lay out the best course of action for your estate.
Related Post: What Is a Charitable Trust?
Why Do People Open Trust Funds?
Most estate planning attorneys and their beneficiaries will tell you that people set up trust funds to help charitable foundations, ensure the smooth transfer of their estate, and the peace of mind they afford. While these are all fantastic and great secondary reasons to start a trust fund, they rarely constitute the primary reason people enlist the help of estate planning attorneys in setting up a trust.
Trusts exist to lower the estate tax burden leveled on families of the deceased. They allow beneficiaries to collect their inheritance without having to pay a massive amount of taxes in order to do so.
Do Your Estate Taxes Warrant an Irrevocable Agreement?
Here’s where things get tricky. When you start a trust, you actually sign over your assets to someone else. This person, known as the trustee, acts as a guardian over those assets. You no longer own or control them.
If something happens to your other forms of income, you will not be able to access this trust money. If you wish to sell off some of your estate under the control of the trustee, you will have to get consent to do so.
Related Post: Four Things to Know About Estate Taxes
Complicated Contracts & Estate Planning Attorneys’ Fees
You should also consider the contracts and fees associated with establishing a trust. When you relinquish control over your assets for the purpose of giving your beneficiaries a stable source of income, or for the purpose of reducing their tax burden, you must consider your contract very carefully.
Remember, the moment you sign the trust over to a trustee you will have absolutely no more say in how that asset gets managed. You must provide strict guidelines in your contract to ensure your trust continues to benefit those you love.
A Davidson Law Group estate planning attorney can help you with this. Just remember that it is also important to take all legal fees into consideration before you start the process.
Get the Facts from Davidson Law Group
Not even the best estate planning attorney can tell you whether or not you should start a trust until they look over your specific financial situation. Before coming to a decision, you should schedule a consultation with an attorney. Contact Davidson Law Group today. We’d be more than happy to take a look at your estate, and help you lay the foundation for your Texas legacy.