In Kentucky, when a person is thinking about creating an estate plan, they are likely to know the basics of a will. However, wills are not the preferable option in every situation. For some, a trust might be better for them.
There could be a perception that trusts are complicated and not worth the effort. Before making that assumption, it is wise to know the fundamentals about trusts and how it might fit in with a comprehensive estate plan.
Know the facts about trusts
Before moving forward, it is important to know the basics about a trust. A primary reason why people choose a trust is to limit the estate taxes that they need to pay. It can also be useful if the person has loved ones and heirs they believe need supervision with their assets.
Examples might be a person under 18, those who are disabled or elderly. It can also be crafted to ensure people fulfill certain obligations to access the trust.
A trust can be revocable or irrevocable. With a revocable trust, the person can change it while they are still alive. After they have died, it cannot be changed. This gives flexibility to adjust it as needed.
As the name implies, irrevocable trusts cannot be changed unless the beneficiaries agree to it. Revoking or terminating an irrevocable trust can be difficult. Still, there are tax benefits. Regardless, those who are thinking about an irrevocable trust should understand that it will generally remain as is once it is completed and should be exactly what the person wants.
People commonly use a revocable living trust. This is created and put into effect while they are alive. It avoids the need for probate after death. Probate is costly and can take time to complete. The revocable living trust gives the person control over their assets and limits taxes.
With a trust, there will be a trustee. This is a person who will oversee the trust and adhere to its instructions. It is important to have someone who can handle the responsibilities to serve as the trustee. They will manage the trust, know the beneficiaries’ needs, be able to address problems and avoid conflicts of interest.
Knowing the benefits of a trust is a key part of estate planning
People who are unsure if a will is the best choice for them might want to think about a trust. These issues can seem confusing and it is always important to have professional assistance to decide how to proceed. This is true with wills and trusts or any other topic that comes up with estate planning. Calling experienced professionals can be imperative from the start.