Five Key Questions That Should Be a Part of Trust Planning
Trust planning is important if you wish to make use of trusts to protect your assets and to facilitate the transfer of assets outside of probate. There are different types of trusts that you can create under Ohio law, and trusts are some of the most powerful legal tools that you can include in your estate plan. However, before you create a trust, you will need to think about what your goals are. Since there are different kinds of trusts, clarifying what you hope to accomplish will help ensure you are selecting the right one.
A Loveland, OH trust planning lawyer at The Zimmer Law Firm can provide you with assistance in determining what type of trusts should be a part of your estate plan. We will work with you to define your goals, determine what trust(s) can help you to achieve them, and go through the formal process of creating and funding a trust. Give us a call today to learn more about how we can help.
Five Key Questions That Need to be a Part of Your Trust Planning
As you go through the trust planning process, there are a few questions that you should ask yourself in order to determine what kind of trust is the right one for you. Five of the key questions to consider include:
- Are you concerned about protecting assets if you need to go into a nursing home? One of the main reasons why people create trusts is to protect their assets from loss. Nursing homes can be very costly and can result in your entire nest egg being lost in a matter of months or years if you need nursing home care. An irrevocable trust may be able to help you keep your assets safe while getting nursing home care paid for by Medicaid. A revocable trust, on the other hand, is not going to prevent your assets from counting in determining if you qualify for Medicaid nursing home coverage.
- Will you need to pay estate taxes? Avoiding estate taxes is another reason people consider the creation of a trust. The IRS provides details on when an estate becomes large enough to be taxable. As of 2015, an estate will be taxed only if it is valued at $5.45 million or greater. If your estate exceeds this amount, you will want to develop a strategic plan to try to prevent assets from transferring during probate and being counted when your estate is valued. While a revocable or living trust lets your assets transfer outside of the probate process, the value of the assets is still considered when a determination is made on the worth of your estate. An irrevocable trust, on the other hand, could be a useful tool in reducing or avoiding estate taxes.
- Do you want to serve as trustee of your own trust? The trustee is in charge of managing trust assets. If you create a revocable trust, you will usually be the trustee and you will name a backup trustee who can take over asset management immediately in the event of incapacity. If you create an irrevocable trust, on the other hand, you’ll usually select someone else besides yourself as the trustee. This is usually done because it has to be very clear the irrevocable trust is a separate legal entity in order to benefit from asset protection.
- Do you think you will need to make changes to your trust? With a revocable trust, you can make changes and even dissolve the trust at any time. If you have created an irrevocable trust, however, it usually cannot be dissolved or even changed very much. In special cases, it is possible to change beneficiaries, but that is usually the extent of the modifications you can make.
- What is your goal for trust creation? Irrevocable and revocable trusts serve different purposes. Revocable trusts protect you in case of incapacity by allowing for asset management by the backup trustee, and revocable trusts can make it possible for assets to transfer out of probate. Irrevocable trusts, on the other hand, can provide more protection from creditors and can protect your assets from counting when you need to qualify for Medicaid nursing home care services.
These are just some of the key considerations that should be a part of your trust planning. The more information you have, the more informed choices you can make about what type of trust is best for you.
How a Loveland, OH Trust Planning Lawyer Can Help
The Zimmer Law Firm has helped many clients in Loveland and surrounding areas throughout Ohio to create trusts that provide desired legal protections. Give us a call at 513.721.1513 or download our FREE estate planning peace of mind checklist to learn more.