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5 benefits of trusts
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Click to learn more about the following benefits of trusts.
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Avoid estate taxes
With estate taxation penalties of 45 percent, your heirs could miss out on nearly half of anything left in your estate beyond the current $2 million exemption. Using trusts, you can make sure that most or all of what you leave behind makes its way to the people or charities you desire, rather than to Uncle Sam.
“Very often, people with significant assets start to think about passing assets to the next generation in a tax efficient manner,” says Lisa A. Schneider, an attorney at Gunster, Yoakley & Stewart P.A., in West Palm Beach, Fla., who specializes estate planning. “If their assets exceed credits against estate taxes — in other words become taxable to the estate — they would look at making irrevocable gifts via an irrevocable trust in order to hold these assets. There are varying types of irrevocable trusts.” While irrevocable living trusts escape estate taxes, there’s a catch: You cannot undo them. They are a done deal. A “fait accompli.” No turning back. Avoiding estate taxes is a good reason to create an irrevocable trust, but the average person would consider other types of trusts, not for tax purposes, but for other benefits. Find out about estate taxes in your state. |
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