Probate Law Services: Building Trusts For Children
If your family is going through the probate process, building trusts for underage beneficiaries can be tricky. Fortunately, probate law services can help you create trusts that are financially and legally designed to protect assets for the future.
Here are some of the ways that probate law services can help your family create a living trust.
Revocable Living Trusts
A living trust protects assets for a predetermined period. The living part of the trust denotes the fact that the trust will exist as long at least one of the beneficiaries is alive and well. A probate law service can help you set up a living trust for underage beneficiaries which can help you avoid the need for future probate petitions.
- Revocable: These types of trusts aren't only legally strong, but they're also private. To create a revocable trust, you'll need to transfer assets to the trust. For instance, if you're looking to set aside stock-options or retirement benefits to fund a grandchild's college education, you will need to sign over these assets to the trust. Probate law services can help you draw up the paperwork and help you assign an executor who will oversee the trust. When choosing an executor, it's important to include language about making sure the trust protects the assets until the beneficiaries reach a predetermined age.
Taxes and Investments
Putting assets into a trust isn't the end of the process. You will also need to decide how the trust will be managed. This often includes reducing tax burdens and creating investment strategies.
- Tax burdens: A probate law service can help ensure that your living trust is constructed to avoid major tax penalties or liabilities. For instance, if the trust is considered an inheritance, the assets are often exempted from local and federal taxes. However, the trust may need to pay taxes on any profits made while the assets are held in trust. The executor of the trust may pay a smaller tax burden if these taxes are paid on a quarterly basis and/or they make small tax-free donations to no-profit organizations.
- Investment strategies: A sizable nest egg can yield significant profits. Having your probate law services firm create investment goals and strategies can make sure the invests have low levels of risk and are only designed to achieve particular financial goals. For instance, you might have the trust diversify their investment strategy to account for dips in the market.
For more information, contact a probate law service.