What Kind of Trust Should I use in My Estate Planning
By Lane V. Erickson, Idaho Estate Planning Attorney
Often when I meet with clients to talk with them about getting their estate planning done, they bring up the issue of trusts. Usually, this issue comes up because they have a parent, or a family member or a close friend who used a trust as part of their estate planning. Because of this, my clients usually feel like they need a trust as part of their estate planning too, even if they don’t understand what a trust is or what it can do for them.
My goal as an estate planning attorney is to make sure that I am creating a customized estate plan for each of my clients. To accomplish this, I work to understand the unique circumstances and particular needs that exist in each client’s life so that I have the ability to suggest the best options they can use as part of their estate planning. Sometimes these options do or do not include using a trust. In some instances, I recommend multiple trusts to a client to accomplish what they need. When this is necessary, I tried to explain to my clients what the trust is, what it can do for them, and how it will help either them, their spouse, or their children.
Through our knowledge and experience our team of premiere Idaho estate planning attorneys at eh Racine law office, are able to provide advice and counsel to each client about using trusts in their estate plan. Our team consists of partners Randy Budge and Lane Erickson and attorneys Nate Palmer and Dave Bagley. Each of our estate planning lawyers has been around for some time. This alone is not enough to qualify us to be considered one of the premier estate planning and probate firms in Idaho. Rather, it is our experience and knowledge that gives us the ability to help our clients with their questions and concerns about estate planning including trusts.
The purpose of this article is not to be exhaustive in helping you understand everything you need to know about trusts. That would be an impossible task. Rather, the purpose of this article is to simply help you understand that there may be trust that could help you as part of your estate-planning. To do this, we will talk about the kinds of trusts you might use for yourself, for your spouse, or for your children.Trusts to Consider for Yourself
The first area of discussion is the type of trust that you might consider using for yourself. The type of trust that you might need really comes down to what it is you want to accomplish. For most individuals, the first thing they want to accomplish is that they want to avoid probate. Avoiding probate can easily be accomplished by using a simple living trust for yourself.
The real key, however, is not creating the trust. Rather, the key to making sure that you are able to avoid probate is to actually transfer your money, property, and other assets that you own personally into the trust while you are alive. I have had countless clients come to me that have had an attorney create a living trust for them, but no assets or property were ever transferred into the trust. When this happens, it’s similar to having a pie crust sitting on the countertop in your kitchen. Your goal may have been to create a pie, but without putting anything into the pie, all you have is an empty pie crust. When we do a trust for a client, we make sure that the transfer a property and assets into the trust also occurs.
A living trust is a revocable trust. This means that you have the power to alter, amend, or eliminate the trust anytime you would like. If at the time of your death the trust exists, and is properly funded, then it’s possible you may be able to avoid probate. If while you are alive you change your mind and don’t want a trust anymore, you have the ability to end the trust and to transfer all the assets in the trust back to yourself.
If, on the other hand, your goal is to protect your assets from potential creditors and other potential liabilities, then you may want to create an irrevocable trust. An irrevocable trust is one that once created and funded cannot be changed or altered or ended by you. Rather, in this instance, the trust will continue until after your death, and then distributions will be made from your trust based on the instructions you have left in the trust. With an irrevocable trust, you can protect your assets from creditors so long as it was created and funded before any debts or liabilities arose.
If you are concerned about protecting your assets, then you should meet with a qualified Idaho estate planning attorney to discuss this issue. There are details and nuances that you should be aware of that cannot be explained exhaustively in this short article.Trusts to Consider for Your Spouse
When it comes to your spouse, you may want to have some sort of a marital trust or a credit shelter trust or a QTIP trust created. Each of these types of trusts are used in a marriage to provide specific benefits do both the individual creating the trust and also to a surviving spouse. Some of these trusts are used in a second marriage, and some of them are used in a first marriage. Usually, these trusts are created to protect assets, and to avoid estate tax liabilities.
Each one of the trusts mentioned above could easily be the topic of its own article. Because of this, specific details about each of these trusts will not be provided. Rather, if you believe you might need one of these types of trusts as part of your estate planning, then we encourage you to meet with a qualified Idaho estate planning attorney to get more details about how such a trust could help you.Trusts to Consider for Your Children
Finally, you may want to use a trust as part of your estate planning to help your children. Using a trust as part of your estate planning for your children is a good idea if your children are minors, or if they are disabled, or if they have some sort of addiction such as with drugs or alcohol. In each of these instances, a trust could be created and used independent of your own basic estate plan or could be created as part of your last will and testament. The purpose of these types of trusts would be to allow the money, property, and assets in the trust to be used for the benefit of your children without ever giving any of these things directly to your children.
For example, if you use a trust for children who are disabled or who have addictions, the trustee can make sure that your children’s needs are met without giving money directly to them. In such an instance, money in the trust could be used to pay for their education, for their health, for their support, or for their maintenance. This could include items such as medical bills, or rent payments, or tuition payments.
It’s important to understand that there are many types of trusts that a person can choose from as part of their estate planning. The type of trust that you choose to use will be based on your particular and unique circumstances. Alternatively, the trust you choose to use could be based on the needs or circumstances of your spouse or your children. Essentially, there is no one trust that will do everything that needs to be done. For this reason, if you have concerns about whether a trust should be part of your estate planning, we are confident that we can help you.Enlist an Idaho Estate Planning Attorney to Help You
Our team of Idaho lawyers can help you with any of your estate planning or probate needs. Whether you are seeking to create or review an estate plan for yourself or would like to help a loved one, we are available to discuss your options and answer your questions at an initial free 30-minute consultation. Call us toll free at 877.232.6101 or 208.232.6101 for a free consultation. You can also email us directly at firstname.lastname@example.org or stop by our office at 201 East Center Street, Pocatello, Idaho 83201. We will answer your questions and help you solve your Idaho Estate Planning problems.