Indiana Trust Attorneys
We Help Clients Protect The Future of Their Loved Ones
The Role of a Trust in Estate Planning
Estate planning is one of the most important things you can do for your family and your future. An estate plan ensures that your legal affairs are in order in the event you become incapacitated and when you pass.
Trusts can be an advantageous part of estate planning, particularly to care for minor children or disabled adult relatives and to avoid probate.
Trusts can be created during the lifetime of a person or couple for their benefit while they are alive (these are often referred to a “revocable trusts”), or the trust can be created at the time of death through provisions in a will. The person creating the trust is called the “trustor,”and the people or organizations specified in the trust are called the trust “beneficiaries” (the beneficiaries may include the trustor or trustors during their lifetime).
Trust Benefits – Protection from Creditors for Some Trust Beneficiaries
People cannot use a trust to avoid their own creditors by creating a trust and transferring their assets to the trust. However, after death, a trust can be used to protect trust beneficiaries (such as surviving children) from their creditors accessing the trust assets if the trust is carefully drafted. Such protection would not be available if estate assets were instead given directly to the beneficiaries(in which case the creditors of the beneficiaries could attempt to seize these assets to satisfy debts such as credit card debt).
A well-drafted trust offers protection against beneficiary creditors by providing that the trust can only be used to pay for items such as living and educational expenses for children.
Trust Benefits – Preservation and Maximization of Trust Assets for the Trustor’s Goals
In addition to protection against beneficiary creditors, other benefits of having a trust include:
- Preserving trust assets so they can benefit the beneficiaries over a period of time. The trust can specify trust assets are to be distributed for a specified number of years.
- Keeping minors or those under a certain age from receiving their full inheritance. Often, trustors (like parents and grandparents) will want to limit substantial payouts to beneficiaries (like children and grandchildren) prior to the time that the beneficiaries reaches a specified age. By limiting payouts, trustors can be better assured that their gift will not be spent foolishly when the beneficiaries are young.
Common Types of Trusts
Trusts can be used for a variety of purposes, including financial, health care guardianship, and other matters. We help clients with trusts including:
- Revocable trusts, or living trusts – these trusts are for the benefit of the trust creators for their lifetime. You, as the grantor, maintain control over the trust. Revocable trusts enable you to change trustees, trust terms, and even end the trust.
- Special needs trusts – these trusts are created for loved ones with special needs. They require experienced estate planning attorneys to ensure that financial aid for those with special needs is not adversely impacted.
- Testamentary trusts – these trusts are created from the assets of an estate at the time of the testator’s death.
- Irrevocable life insurance trusts – these trusts are funded with life insurance proceeds, and can be used to in some instances as a means for minimizing or eliminating certain estate taxes.
Is a Trust Right For Your Needs?
As experienced Indiana trust attorneys, we help clients understand the pros and cons of various trust options so that a determination can be made as to whether a trust will be beneficial. By carefully reviewing your goals and issues, we work with you to ensure your assets are transferred in the manner you feel is most appropriate.
We are also experienced in all duties of a trust administration, including management of assets, preparation of tax returns, and investment of assets. In this capacity, we offer a wide range of trust services to clients.
Schedule a Free Initial Phone Consultation with a Partner and Find Out if a Trust is Right for You