Retirement and estate planning can be a complicated process. Let’s face it. You have worked a lifetime to amass enough money and assets to get you through your retirement years or provide for your loved ones, and no one wants all of the work to amount to nothing. Crafting a retirement and estate plan means complying with tax laws, investing, managing, and finding ways to keep as much of the money you earned as possible. One instrument that can help you maximize your investment as well as reduce some of your tax liability is a trust. Below are just some of the ways that a trust can benefit your retirement or estate plan. 

A trust lets you pass your wealth to heirs without going through probate

One reason that many people use trusts for their estate planning process is so that they can pass their wealth to their heirs without the hassle and publicity of going through probate. If assets are transferred to beneficiaries through a will, then the estate will be settled in the state probate courts. Probate court is a public process that can take longer than many people will expect, sometimes even longer than a year. Also, if you hold assets in multiple states, you will have to have each of these go through each state’s probate court. 

Probate can not only result in delays but also come with higher costs, even when they are no contact between beneficiaries. With a trust, you will be able to privately, more easily, and more quickly, disperser your estate to your heirs in accordance with your final wishes. 

A trust can provide you with tax benefits

You will have a choice of creating either a revocable or irrevocable trust, which essentially will determine whether or not the trust and parameters can be changed after it is signed. If you are looking to gain any tax benefits you can, then the ideal option would be an irrevocable trust that cannot have alterations once it has been signed. An irrevocable trust means that all of your assets have been transferred out of the estate and into the trust. Even though contributions to trusts can be subject to a gift tax, if they are structured properly, and certain conditions are followed, then they will not be subject to estate taxes in the event of your death. You also will be able to make an annual gift of $15,000 if you are a single filer, or $30,000 if filing a married joint return, which will be exempt from the gift tax, saving you even more. 

A trust will give you better control over asset distribution

You can structure a trust in any way you see fit, which means that your assets can be distributed to your beneficiaries the way that you intended them to. This provides you with the ability to set up distributions for specific purchases or milestones. For example, you could have money available to your children or grandchildren to pay for college expenses, a wedding, or a down payment on a new house. You could also set it up using age determinations for your heirs to get the funds periodically throughout their life so that it can be used as a supplemental income. For example, you could give them 20% at the age of 30, 30% at the age of 40, and the balance when they reach the age of 50. 

If you wish to use some of the money from your estate for charity, you can also mark distributions throughout your heir’s life, with any money left over going to the designated charity of your choosing. The flexibility in the structure of a trust can make it the best tool for dispersing complicated estates. 

Contact Atlanta Wills + Trusts Law Group by Refeca Law LLC

If you feel like a trust would best suit your purposes for your retirement or estate planning, you will need to talk to an experienced estate planner to ensure that all the requirements are met and that your wishes are fulfilled in the way you envisioned. Atlanta Wills + Trusts Law Group by Refeca Law LLC knows the ins and outs of the estate and retirement process, the applicable tax laws, and can help provide you with the best advice to protect the wealth you have worked so hard for and ensure that your heirs receive what was intended for them in as timely a manner as possible. Don’t put off your future. Contact us today to schedule an initial consultation. 

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Additional Reading

https://www.usbank.com/investing-and-retirement-planning/financial-perspectives/trust-and-estate-planning/benefits-of-setting-up-a-trust.html

https://www.barrons.com/articles/trust-estate-planning-51550696439

https://www.fidelity.com/viewpoints/personal-finance/reasons-to-consider-a-trust