Estate Planning Basics
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What is a trust?
A trust is a legal entity that is created for the purpose of transferring property to a trustee for the benefit of a third person (beneficiary). The trustee manages the property for the beneficiary according to the terms specified in the trust | |
Advantages of Trusts
Why you might consider discussing trusts with your attorney
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Trusts may be used to minimize estate taxes for married individuals with substantial
assets.
- Trusts provide management assistance for your heirs.*
- Contingent trusts for minors (which take effect in the event that both parents die)
may be used to avoid the costs of having a court-appointed guardian to manage your
children's assets.
- Properly funded trusts avoid many of the administrative costs of probate (e.g.,
attorney fees, document filing fees).
- Generally, revocable living trusts will keep the distribution of your estate private.
- Trusts can be used to dispense income to intermediate beneficiaries (e.g., children,
elderly parents) before final property distribution.
- Trusts can ensure that assets go to your intended beneficiaries. For example, if
you have children from a prior marriage you can make sure that they, as well as
a current spouse, are provided for.
- Trusts can minimize income taxes by allowing the shifting of income among beneficiaries.
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Properly structured irrevocable life insurance trusts can provide liquidity for
estate settlement needs while removing the policy proceeds from estate taxation
at the death of the insured.
*This is particularly important for minors and incapacitated adults who may need
support, maintenance, and/or education over a long period of time, or for adults
who have difficulty managing money.
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Prepared by Broadridge Investor Communication Solutions, Inc. Copyright 2024. |
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