When it comes to estate planning there are some common goals found in almost all plans and then there are very individual goals that are as unique as the individual creating the estate plan. One common goal is to provide for future generations after death. In fact, that is the primary goal of most estate plans. Maximizing the assets you have requires careful estate planning to ensure that you leave behind as much of your estate as possible for your children, grandchildren, and successive generations. Creating a family wealth trust is one way to accomplish this goal.
For a variety of reasons, gifting all of your assets using your Last Will and Testament is often not the best method. Probate and tax avoidance are two reasons to avoid gifting in your Will. Protecting assets from both creditors and from spendthrift beneficiaries is another good reason to consider gifting in a trust instead of in your Will. A family wealth trust can address all of these concerns if drafted properly.
Trusts in general are becoming increasingly popular additions to an estate plan because of the numerous benefits a trust offers as well as the flexibility trusts offer. A trust can become effective while you are alive (inter vivos, or living trust) or when you die (testamentary trust). Trusts can also be revocable or irrevocable.
To gain the most tax benefits and asset protection from your trust you will likely create an irrevocable living trust. The advantage to this type of trust is that once assets are transferred into the trust they cannot be touched by creditors, thereby assuring that the assets will be available for future generations. The downside, however, is that you cannot modify an irrevocable trust once it takes effect.
A primary benefit of a family wealth trust is the ability to control assets long after your death. Using the trust terms you are able to guide future generations by deciding what the trust assets can be used for ahead of time. Another significant benefit is that the assets held by the trust will, assuming the trustee manages them well, continue to grow long after being transferred into the trust. This, in turn, grows your family wealth and ensures that successive generations will benefit from your gifts.
If you think a family wealth trust might be right for your estate plan, consult with your Illinois estate planning attorney.
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