You’ve worked hard all your life and want to leave a legacy for future generations. Setting money aside in a bank account or other types of investments can be beneficial. Still, there are a few challenges that your family might encounter when the inheritance is passed down.
The problem with basic investments is that the beneficiaries often lose a lot of value due to estate and gift taxes. You can leave a stronger legacy by structuring your estate in a trust, which helps reduce the amount of taxes paid after you are gone. This approach to financial planning ensures that future generations will receive as much of your wealth as possible.
Types of Trusts for Estate Planning
Different types of trusts can be used for estate planning, which is why the best solution is to talk to an estate planning attorney for assistance. Often, families use an irrevocable trust, such as a dynasty trust. This type of trust is designed to pass assets to beneficiaries.
First, the trust is created, and then you can transfer assets to the trust. Not only does a trust protect these assets from estate and gift taxes, but having a trust can also protect assets from future divorces and creditors. Having a trust also ensures that your intentions for the assets are honored after you are gone.
Rest assured, knowing that a trust can be set up to last an indefinite period. You can start the trust at any point in life, and it will be a safe place for your assets until the time comes to pass these assets to beneficiaries. So, this strategy is a great solution, especially if you anticipate that wealth will be passed from generation to generation.
What Sets Apart a Revocable Trust from an Irrevocable Trust?
Talk to your estate planning attorney to learn more about the differences between these trusts. Simply put, a revocable trust makes it possible to change the terms while the trust is active. An irrevocable trust cannot be changed, which is why it’s an ideal solution for protecting wealth through multiple generations.
Contact an Estate Planning Attorney for Personalized Recommendations
If you need help setting up your trust, reach out to our experienced team at Miles & Hatcher, LLP. Call at your convenience to schedule a free consultation: (909) 481-4080.