Taking Your Future Seriously
Estate planning can be an overwhelming and challenging process. There are seemingly endless options to include. One of the most popular documents in an estate plan is a trust. A trust is one of the best methods for passing assets to your family and loved ones after you’re gone, especially if you want to leave assets to your loved ones without the hassle of dealing with the probate process.
In Minnesota, the probate process can take months or years and can be expensive and emotionally draining for your loved ones. Setting up a trust with an experienced estate planning attorney can help your family avoid these contentious situations in the future.
Our team can work with you to answer all your questions and fully understand your goals before drafting your trust. With something as serious as your future and the future of your loved ones, we use care and consideration when providing legal guidance.
Protecting Your Family
A trust is a fiduciary agreement that gives a trustee the right to hold and manage assets for the benefit of a specific person or organization. A trust enables you to transfer your property and assets to particular beneficiaries. It offers control over your estate and the possibility of minimizing estate taxes.
Two main types of trusts are commonly used in estate planning: a revocable living trust and an irrevocable living trust. A revocable living trust allows you to alter the trust by adding or removing assets or changing beneficiaries. Upon your passing, the trust’s assets will be preserved and protected for your beneficiaries. An irrevocable living trust does not allow for changes once you have gifted the assets to the trust.
There are many benefits to having a trust, including:
- Low maintenance
- Avoid probate court
- Protect your wealth and assets
- Reduce estate taxes
- Prevent conservatorship
- No delays in distributing assets
Trusts can be complicated to draw up, especially if you have a large estate. However, working with an experienced trust attorney can make the process more manageable. We can help you create a trust that will protect and maintain your heirs and estate.
Understanding the various trust types available under Minnesota law for asset management and protection
Revocable Living Trust
A revocable living trust allows the grantor to retain control over their assets during their lifetime. The trust can be modified, amended or dissolved as circumstances change. This flexibility makes it a popular option for those wishing to avoid the lengthy and expensive probate process upon death. However, because the grantor maintains control over the assets, there are no significant tax benefits, and the assets in the trust remain part of the grantor’s estate. This means the assets are not protected from creditors.
Irrevocable Living Trust
On the other hand, an irrevocable living trust is much more rigid. Once established, it cannot be changed without the beneficiaries’ consent, and the grantor loses control over the assets placed in the trust. This structure offers substantial benefits in terms of tax savings and asset protection. Assets in an irrevocable trust are no longer considered part of the grantor’s estate, which may help reduce estate taxes and protect the assets from creditors. However, it is difficult, if not impossible, to alter after creation.
Testamentary Trust
A testamentary trust is created through a will and only occurs upon the grantor’s death. It is used to manage and distribute assets to beneficiaries over time, especially for minors or those incapable of managing large sums of money. However, unlike living trusts, testamentary trusts do not avoid probate, and the assets remain part of the decedent’s estate until the trust is established. Unfortunately, there is no privacy, as wills are public records.
Special Needs Trust
A special needs trust is designed to provide financial support to individuals with disabilities without disqualifying them from government assistance programs such as Medicaid or Supplemental Security Income (SSI). These trusts are carefully structured to help ensure the beneficiary retains access to essential services while benefiting from the trust’s assets. It allows beneficiaries to maintain eligibility for government benefits, but it is complex to set up and manage. Additionally, it requires careful planning to ensure compliance with legal requirements.
Successful Trusts Require An Experienced Attorney
You can depend on Peterson Law Office, LLC to create a trust that will protect your assets and future. Contact us now to schedule a free consultation at 952-641-7312 or contact the firm online.