If you’re like most people in New Hampshire and throughout the country, you have likely thought about creating a trust to meet your estate planning goals. However, you may be wondering if creating a trust is necessary if you already have a will. This will depend largely on what your needs and goals are now and for the future.
Trusts can be ideal for transferring assets
Assets that are held in a trust are typically not subject to probate. This means that they can be transferred immediately after a person dies. Alternatively, they can be transferred to beneficiaries in any manner that you see fit. For instance, you might decide that your adult child will get half of his or her inheritance on the day you pass and the other half a year after that happens.
Protect children from a previous marriage
If you have children from a previous marriage, there is no guarantee that your new spouse will transfer marital assets to them after you die. Putting money or other property into a trust ensures that they will receive those items at some point in the future.
Trusts can be used for tax planning purposes
Using a credit shelter trust could reduce or eliminate estate taxes paid at the state or federal level. While the federal exemption is currently $11.8 million per person, some states have exemptions as low as $1 million. Furthermore, not all states allow spouses to combine their estate tax exemptions. In many cases, beneficiaries who receive assets held in a trust are entitled to step-up in cost basis. This means that they don’t have to worry about capital gains taxes or other taxable consequences of inheriting something that has appreciated in value over time.
If you’re interested in learning more about how trusts can be a part of your estate plan, consult with an attorney. Legal counsel may provide insight into how you could meet your estate planning goals.
