Three Key Considerations As You Plan For Your Future

In 2022, and after living through the pandemic, everyone needs an estate plan, it doesn’t matter what your socio-economic circumstances are.

A simple estate plan will typically contain at least three documents. This will generally include a durable medical power of attorney and a durable financial power of attorney. The other document typically found is a way to pass your property upon death such as a will.

However, there are times when a trust might be an option in your estate planning instead of or in addition to a will. So why should you consider a trust? Trusts are useful estate planning tools that can accomplish a variety of goals. They can help avoid probate, minimize taxes, and be used to give property to minor or disabled loved ones. Trusts can be created during a person’s lifetime (Living Trusts) or at the person’s death (Testamentary Trusts). Some different types of Trusts from both categories are discussed below.

Living Trust

A person can transfer their assets to a Living Trust and, as trustee, continue using their assets as they always have.

Tax Planning Trusts

Several different types of Living Trusts provide flexible alternatives for minimizing capital gains and estate taxes, including the Charitable Remainder Trust, Irrevocable Life Insurance Trust, Qualified Personal Residence Trust, Grantor Retained Annuity Trust,and Grantor Retained Unitrust.

Why Would I Consider A Trust For My Estate Planning In 2022?

Testamentary Trusts

A person can create a Trust under a Will, called a Testamentary Trust, which does not take effect until they are deceased.

Disability Trusts (also known as Special Needs Trusts)

A Disability Trust is a type of Living Trust that allows a disabled person under the age of 65 to use her own assets for her special needs, other than food and shelter, and keep public benefits, such as Medicaid and Supplemental Security Income (SSI).

3 reasons you may need a trust as part of your estate plan

n Are you concerned about protecting a gift from creditors or litigation? n Does a loved one need nursing home care or Medicaid eligibility? n Do you want to provide for children, grandchildren or charitable organizations? The types of assets you own is another important consideration. Here are three typical reasons you might need a trust.

1A loved one cannot be trusted

with a large gift or has special

needs If you have concerns that a child does not have the financial skills to manage a gift or the loved one receives government benefits.

2You want to transfer complex

assets in a thoughtful manner

Trusts can be effective for keeping a vacation home or a closely-held business in the family. For large Continued on page 34

Three Key Considerations As You Plan What happens when I can no longer make medical and financial decisions? For Your Future

If the power to make decisions is ever not your own, ensure you have nominated the right people through Powers of Attorney, making them legally responsible for acting on your behalf. Otherwise, court proceedings determine who makes decisions for you. Understanding how the process works and your rights and responsibilities is critical.

Do I need an estate plan? Everyone needs proper documentation in place sharing your wishes. How do you want assets distributed? Are there special considerations, disabilities, or beneficiaries needing more support? With the right planning many of these can be addressed. Is probate avoidable? Probate is the court procedure by which assets are transferred after death to those named in a Will, or to people listed in Colorado’s inheritance statutes. The proceedings are public and can take 8 to 12 months or more, even in the simplest of cases. Trust planning can help avoid probate, simplifying the process for your loved ones. ~

Editor’s Note: This article was submitted by Andrew P. Stone, Esq., the principal attorney with Stone Law, LLC and may be reached at 877-897-6591 or by email at andrew@stonelawllc.com See ad above.