Estate & Trusts LawyersExperienced Trust Attorneys in St Cloud, Big Lake, and Cold Spring Minnesota
Trusts – What Are They and How Do They Help?
A trust ensures a successor is appointed to deal with your estate at the time of your death or if you become incapacitated. Many people set up trusts to avoid their estate going into probate (a court process in which someone will legally be appointed to represent the deceased) and other complications. With many types of trusts available, let our experienced attorneys help you choose the right trust for you and your estate. The following options provide information when deciding if a trust is a right choice for you.
Types of Trusts in Minnesota
Living trusts hold the trust maker’s assets and help them manage their affairs while alive. Assets placed in this trust will continue to benefit you throughout your lifetime. The trust maker, trustee, and beneficiary are typically the same person. A successor trustee should be designated in the event of mental incapacity or death. Having a living trust will make it much easier for a trustee to take over the management of assets. The three most important reasons to have a living trust are to avoid probate, save money, and maintain the privacy of your estate.
Probate occurs when there is no trust or if things are unclear. With a living trust, estate planning is crucial to avoid probate and to have assets distributed quickly. Although there are costs associated with creating a living trust, a trust will save money in the long run. Finally, after death, a trust is not made public. Therefore, the trust will allow you to keep your privacy.
Special Needs TrustsSpecial needs trusts are created to benefit people with physical and/or mental disabilities. These trusts are used to manage any real estate, belongings, and money the beneficiary owes. The person benefiting from the trust is the beneficiary, and the person in charge of managing those assets is the trustee. When trusts are formulated, the essential criteria to remember are the beneficiary’s needs, lifestyle, and future. Depending on the property owner, the special needs trust will be first-party or third-party. Trusts are considered third-party when the property (real estate, money, belongings) is owned by someone else, such as a parent. First-party trusts hold assets owned by those with special needs, such as money from an accident or inheritance. For example, if a loved one left the disabled person money through their will, it might disqualify them from governmental benefits. Special needs trusts ensure the person will continue to receive government assistance.
Supplemental Needs Trusts
Supplemental needs trusts and special needs trusts are essentially the same thing. The trust was first known as a supplemental needs trust because of its purpose to supplement the need for public government programs. However, it has since become known as a special needs trust which better expresses the beneficiary’s needs.
Revocable living trusts are also known as living trusts. They are considered revocable because changes may be made to the trust as circumstances or wishes change over time. Trusts are “living” because they are created over your lifetime. Living trusts are a great way to avoid probate, which is when the court determines how a person’s estate is divided up.
When the trust maker is living, they can invest or spend any assets included in the trust. Since the trust is revocable, the owner can make changes along the way. When the trust maker becomes mentally incapacitated and can no longer make decisions, management of the trust then goes to the successor trustee. Whoever takes over responsibility can then manage the original trust maker’s estate. Revocable trusts automatically become irrevocable when the trust maker passes away; no additional changes may be made to the trust. The successor trustee then has the responsibility to distribute any remaining assets listed on the trust and pay any outstanding bills, taxes, and debt.
Irrevocable Living TrustsIrrevocable trusts are the opposite of revocable, meaning they can not be changed without the beneficiary’s permission. There are various reasons to set up an irrevocable trust, including estate and tax considerations. Irrevocable trusts are protected against creditors and are commonly used for estate tax reduction. In addition, beneficiaries can ensure their assets are preserved.
Charitable trusts are used to leave some or all of a person’s estate to charity. There are many ways to set up a charitable trust, so discussing these options with an experienced estate planning lawyer is best. Two common methods are to either leave a certain amount to be paid to the charity and the remainder to the beneficiaries or vice versa. These trusts are typically tax-exempt, and the IRS must approve the charity from which the assets will be received. One of the significant benefits of charitable trusts is the tax breaks received. The estate taxes are dramatically reduced when the trust is eventually passed on to the donor’s heirs.
Trust & Estate Attorneys – Let Us Help You With The Big Decisions
Trusts are a great tool to ensure precisely how assets owned will be managed in the future. This task will have an enormous impact on you and the lives of those around you. Make sure to have someone trustworthy to help decide which options are best for the specific situation and person. The law firm of Jeddeloh Snyder Stommes provides clients with experienced and trusted representation.
Whether you are setting up a will, guardianship, or a health care directive, you need an attorney who will help you with every step. We are one of the top law firms in St Cloud, Minnesota, specializing in Estate Planning and Elder Law. Our lawyers will make sure that you and your assets are protected.
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