When planning for your family’s care after your death, you want to leave them with the best possible scenario. Probate court can be time-consuming and lead to your heirs not getting access to the money they may need to live. There are many different ways an estate planning lawyer can help you establish trusts that prove beneficial to you while you’re alive and take care of your family after you die. A discretionary trust is one such device. Learn more about it so you can decide if you want to speak to your attorney about initiating the process.
What Is a Discretionary Trust?
A trust is not always the best way to protect your loved ones after you die. While trusts are often the fastest way to get money to your family as they do not have to pass through probate, they are not always immune from collections. Debt collectors can move for a judgment to collect outstanding monies that you may owe or, more likely, money that your heirs owe. Trusts do not serve as a protective measure against seizure due to a personal injury lawsuit, or spouses, should they divorce. A discretionary trust ensures that your heirs get and keep all the property you leave them.
What Does “Irrevocable” Mean?
A discretionary trust is irrevocable. This means that once it is started and funded, it is permanent and cannot be rescinded. An irrevocable trust helps you during your lifetime as well by providing the same shelter for your property against seizure. It also reduces your tax liability since assets are removed from your name and deposited into the trust.
What Are the Benefits?
As stated above, a discretionary trust affords a layer of protection for your assets. It also serves the same function for the trustee. It can reduce estate taxes for the heirs, which can be quite a savings. However, there is more this type of fiduciary tool can do. It also helps you protect the intended beneficiary from themselves. Say you have an adult child who does not do well with money. You can put conditions on the trust that reduce the amount your child can receive at a time. You can appoint an administrator for the trust who will control the payouts, ensuring that your child has money for the future.
A discretionary trust may sound complicated, but when set up by an estate planning lawyer, it is somewhat simplified. Speak to a lawyer, like an estate planning lawyer in Alexandria, LA from Theus Law Offices, so you can get started on the process.