A trust is an agreement that establishes a relationship between a trustor, sometimes called the grantor, and a trustee. The grantor gives the trustee some assets or properties to hold until they are transferred to the final beneficiary. Trusts are used in estate planning to avoid the probate process and directly transfer property from the deceased to their chosen beneficiary.
Some trusts are established at the time of death, known as testamentary trusts, while other trusts are created while the grantor is living. These living trusts don’t have to transfer the property after the grantor has died. A living trust just needs a set series of requirements to be fulfilled.
A last will and testament, often shortened to just “will,” is a legal document written by an individual that expresses their intentions for assets, dependents, and other aspects of their estate after their death. Any individual who passes away without a last will and testament will be declared intestate and have their assets divided by the state.
Historically, wills have been recorded in a number of formats including written wills, verbal wills, or online wills. In the modern day, the laws of different states dictate what kind of wills are valid. State laws may control the format of the will, the number of witnesses required, or the notarization necessary for a valid will.
State and federal estate taxes are flat taxes levied on the estate of a deceased individual. The total amount of assets is calculated as the gross estate of the deceased. Assets that make up the gross estate include annuities, businesses and shares of businesses, cash, financial securities, insurance policies, real estate, and trusts.
States each have their own estate taxes, but the federal government levies an estate tax of 37%. That is a high rate of taxation but few people ever pay it since the tax allows a deduction of up to $12.06 million. That means that unless the deceased has more than $12.06 million in assets, the estate tax is not a major concern.
Estate planning is the single most important undertaking that anyone does. If you have any property that you want to pass to a friend, organization, or distant family member, you will need to make sure that you put those wishes in a legally binding will. If you are intestate, meaning you do not have an estate plan, the government will assign an administrator to divide your assets according to state law.
When an administrator divides your assets, they will settle your debts and distribute your remaining estate according to state law. Most state laws do not recognize the claims of unmarried partners, friends, or organizations as valid. Instead assets will be distributed to immediate family, distant family, or kept by the state. In order to prevent this from happening, you need to make a comprehensive estate plan.
If you are looking to enshrine your wishes in a will or trust, you will need the help of a trusts and estates attorney. An experienced trusts and estates attorney will be able to help you explore your options to ensure that your assets are distributed as you wish. The best place to find a trusts and estates attorney is Attorney at Law.
At AAL our nationwide network of attorneys and law firms allows us to match you with the best trusts and estates attorney in your area. Our attorneys have the experience, legal expertise, and local to help you explore your options and get you the outcome you deserve. In addition to legal expertise, our attorneys also excel in client care. Our firms ensure that their clients are cared for and questions are answered.
Don’t wait. Contact AAL today for a complimentary consultation and secure your future.