Different Kinds of Trusts and Their Uses

If you have property or assets that you want to leave to your heirs, then you have several options.  A trust can shield these assets from taxation and also probate.  It allows you to protect your legacy and control your wealth.  They are essential to good estate planning so it is important to know what they can do.

There are two types of trusts.  The first is a living trust, which is called that because it is active during the grantors lifetime.  A living trust can either be revocable or irrevocable.  A revocable trust can be changed at any time in the grantor's lifetime.  If a relationship, circumstances or your intentions change then it is not an issue.  But while it does avoid probate, a revocable trust is subject to estate taxes.

An irrevocable trust is the opposite.  It immediately transfers your effects out of your estate and into a separate legal entity. There is no way to change your mind or use these assets because they are not yours anymore.  Benefits of an irrevocable trust is that it can avoid probate and estate taxes.

The other type of trust is called a testamentary trust.  These kind are specified in a will document and only created after the grantor has died. The funds can be subject to probate and estate taxes but can accomplish a variety of goals.

One example is a bypass or credit shelter trust which can protect your estate from taxation.  It allows the transfer of the most money allowed without being subject to taxation and then moves the rest to your spouse completely tax free, even if the estate grows.  Another example is a generation-skipping or dynasty trust.  It allows the transfer of a sizable amount of assets tax-free to beneficiaries that are at least two generations removed, such as grandchildren.

If you are interested in leaving the most assets to your heirs, then you should consider setting up a trust.  Contact an experienced estate planning attorney in DuPage County who can suggest the best trust for your given situation.

Protecting Your Identity Even After Death

The Internet puts knowledge at the tips of your fingers.  But unfortunately it also allows thieves to gain access to Social Security numbers and other private information.  But in recent years, this practice does not only target the living, but the deceased have become the preferred victims.

The thieves gain access to this information from obituary notices and other files online.  Some reports confirmed that for as little as ten dollars, anyone can buy the Social Security number of a departed person.  With that info, they can apply for loans, collect tax refunds, open up credit cards, and other things which require a Social Security number.  Current research suggests that each year 2.5 million deceased individuals have their identities stolen.

There are tips to protect your family as part of your estate plan, which can be provided to the executor of your will.  The first step is to limit the information which is included on the obituary.  Without date of birth, middle name, address, or other information, it will considerably harder to steal the deceased's financial information.

Another piece of advice is to notify credit reporting bureaus, banks, and other government agencies about the passing of a loved one.  Mailing an official death certificate to all financial institutions can stop thieves from receiving new lines of credit of a deceased person.  Another good idea is to cancel the driver’s license and to put the deceased person on the “Do Not Call” list.

It will be important to locate and protect financial documents that are left behind by the deceased.  This can include ID cards in wallets or purses, old hospital records, or bank statements.  Also be aware of information that may be saved on computers before reusing them or getting rid of them.

If you have any other questions about protecting yourself or providing for your family members after you can’t anymore, then please contact an experienced estate planning attorney in Wheaton today.

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Identifying Your Assets

Estate planning may seem a daunting task, better left for the very rich or the savvy investor. An asset, however, can be anything—from a simple family home to an insurance policy—things that any average American may possess. Upon your death, what happens to your assets will be determined by the court if you don't make your wishes known beforehand. To do this, you'll first need to identify your assets and take stock of them. According to CNN Money Magazine, "these include your investments, retirement accounts, insurance policies, real estate, and any business interests." 

Deciding where they will go upon your death is the next step. That is, you need to decide to whom you'll like your assets to go—only then can you begin to put framework in place to ensure that this happens. Your children? Your spouse? Begin by making a list of people you trust, and assigning them to various holdings. "Once you decide what kinds of bequests you wish to make, be sure to discuss your plans with your heirs," according to CNN Money Magazine. "The sooner and more distinctly you outline your intentions to your family and friends, the less chance there will be for disagreements when you're gone."

Remember that your first draft doesn't have to be set in stone. Be open to what your family wishes as well, and factor in personal attributes when deciding who'd be best to handle which assets. If your child is a real estate broker, he might be best to handle the home. If a younger sibling is an insurance agent, she might be a shoe-in to distribute any money incurred through insurance policies.

Identifying your assets is just one of the many facets of estate planning. Don't go through it alone. Contact an experienced estate planning attorney today.

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