Trusts In Estate Planning.

Trusts in estate planning are widely used largely because they create a high degree of  flexibility, whilst providing an enormous amount of legal protection and security to the individual or family.

You can create and fund a trust during your  lifetime or create one by the terms of a will or trust at death.

The terms of some trusts may allow them to be changed or even revoked by the grantor. Other trusts may be fixed or irrevocable at the date of creation.

In estate and financial planning, there are several common purposes for using trusts.

• Managing assets. The responsibility for making investment decisions and maintaining adequate records can be transferred to either a corporation or an individual trustee.
• Protecting assets. In certain situations, a properly drafted trust can protect the assets in a trust from creditors or a spouse in the event of a divorce of the beneficiary.
• Providing privacy. The assets, terms, and conditions of a trust are generally not subject to public inspection.
• Reducing probate.  In some cases, avoiding probate can save time and reduce administrative expenses. Assets which are held in a trust that has been created and funded during the grantor’s lifetime are controlled by the terms of the trust, not by the terms of probate.
• Providing for multiple beneficiaries. A trust can be created for multiple beneficiaries and can allow the trustee to use discretion in making distributions.
• Providing for special needs. A beneficiary may have a special need relating to education, guardianship, disability, ill health and so on. A trust can be used to address those special needs.
• Tax planning.  A trust can be used to help take full advantage of the combined marital deduction and estate tax credit while assuring that assets can be available to meet the needs of the surviving spouse. As a result, your will could leave all your assets to your spouse except the amount equivalent to the estate tax exemption amount.
• Family Trusts. Represent assets that go into the “family trust” for the benefit of your spouse and family. Although your spouse would be able to benefit from the entire estate, the trust assets would not be included in the estate of the surviving spouse on their subsequent death.