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Trusts are valuable estate planning
tools that can potentially save money
on estate taxes, probate and other
expenses. But trusts are not always
the least expensive alternative.
Cost depends on variables, such as
the size and complexity of your estate,
estate or inheritance taxes,
attorney fees and probate costs.
Trusts usually cost more to create
than simple wills. You or your heirs
may also have to pay for professional
management; this is generally a sliding
scale annual fee of your trust’s assets,
depending on its current market value.
Assets placed in the trust must usually
be retitled, involving additional time
and expense. Some trusts must also
file annual federal income tax
returns.
In general, estate taxes are
due on property you own at the time
of your death. State-imposed inheritance
taxes may add additional taxes. Because
property placed in a revocable trust
remains under your control, it is
subject to estate taxes. Only
property in an irrevocable trust
avoids estate tax; however, a
transfer of property to an
irrevocable trust is usually
considered a gift, so gift tax
liability may be a consideration.
It is easy to delay estate
planning until it is too late.
And while it is often difficult to
think about providing for your
family after your death, it is
one of the most important and
most loving acts you will ever
do for them.
Since estate and inheritance
tax laws vary from state to state,
creating a trust requires consultation
with an attorney and/or estate planner
experienced in dealing with the law of
estates and trusts. It is also sensible
to speak with trust professionals such
as those found in banks or accounting
firms. They should have the expertise
to help you develop a workable estate
plan that will not only protect your
family, but also help preserve more
of your estate for the family’s benefit.
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Basic Money Management
Basic Money Management
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