Sound Trust Based Planning
The basic question many people have is should I plan with a will or a trust. Well, if you create a revocable trust and it is properly funded, then the proceedings in court will be substantially minimized, if not completely avoided. You see, assets in a revocable trust do not go through probate. What does that mean? It means that these assets are “non-probate” assets. This means the trustee (or successor trustee) has sole and immediate authority and responsibility regarding trust assets. With a little bit of counsel and assistance, the administration can be made much easier and much less costly. With a revocable trust, you can also spell out within the revocable trust…. the terms of trusts that will serve as metaphorical containers for assets you leave to loved ones. This allows you to shape beneficial interests and use the law to protect these assets from loss to in laws, loved one’s own indiscretions, estate taxes, and permits you to ensure your assets will stay in your family. There are two exception creditors that can reach assets in a spendthrift trust (a trust with a spendthrift clause) and they are (1) the IRS and (2) a child who is owed child support payments.
Mark F. Winn, J.D., Master of Laws, LL.M. in Estate Planning, is a local tax, asset protection and estate planning attorney.