An attorney that focuses on estate planning frequently hears certain common goals from clients. Perhaps the most obvious goal is for estate assets to pass to their designated heirs and beneficiaries, and to avoid unexpected results, entanglements or family disputes.
However, estate planning can also provide for much more nuanced outcomes. For example, many individuals hope that a well-designed estate plan will minimize their taxes, protect their assets from unanticipated nursing home or long-term care expenses, and avoid the delays and costs associated with probate. In the event of incapacity or disability, individuals want someone that they can trust to step in and handle their affairs. That decision-making authority may extend beyond financial matters to medical decisions, possibly even end-of-life matters.
There are a variety of documents that can accomplish these goals. If an individual desires to establish a framework for transferring estate property upon his or her death, while simultaneously maintaining control over assets, a lifetime revocable trust may be the solution. That type of trust does not shield an individual from tax liabilities because of the simple fact that control is retained over the assets. Nevertheless, a revocable trust usually can avoid probate. Perhaps even more important is that it starts the conversation about estate planning.
For circumstances that are more permanent, an irrevocable trust might be desirable. Property put into this type of trust will be subject to the trustee’s discretion. However, since it is out of the grantor’s control, it will offer tax savings. With the help of an attorney, an individual can craft a multi-generational wealth transfer plan.
Source: U.S. News & World Report, “How to Choose Between a Revocable and Irrevocable Trust,” Joanne Cleaver, June 19, 2014