Trusts are an important part of your estate plan when you want to leave money to your minor children. Trusts ensure that money, managed by a trustee, is set aside and made available to them when they reach a certain age. They are often complex, time consuming to set up and oversee, and cost money. So you should have a good reason to go to all this trouble!
Here are some common benefits and objectives of using trusts:
One common tax-saving trust is an irrevocable life insurance one. After you die, the proceeds from your life insurance policy (the death benefit amount) are added back into your estate, often turning an estate that isn’t subject to federal estate taxes into one that needs to write a substantial check to the IRS! However, it is recommended to consult with finance advisors in Arlington to handle the thing professionally.
However, an irrevocable life insurance trust shelters life insurance death benefit proceeds from estate taxes. After setting up the trust, you still have life insurance, and your beneficiary or beneficiaries still receive the proceeds from your policy upon your death. But now, estate taxes may not be a problem.
Avoidance of probate
Probate is the process required to determine whether or not a will is valid. Probate can prove to be costly and time consuming. Thus, to avoid such a long and expensive process, a revocable trust is the best option. However, the extent of the benefit may vary depending on the situation and the place you live. The best option is to hire finance advisors in Arlington to make the process of trust understandable and to reap maximum benefits.
Avoiding probate can prove to be beneficial especially if you own a number of properties in more than one state. Because, in the case of probate, each property has to deal with separate proceeding which results in multiple probates.
Availability of Assets at Death
After the grantor’s death, assets in a revocable trust can be made available to raise cash and pay the estate taxes, administration expenses and debts without waiting for a probate decree or issuance of preliminary letters.
With the help of a revocable trust (before or after death), a grantor can have monetary benefit through expert cash flow analysis provided by the financing experts in Arlington.