In 2001, Georgia residents and others could only exempt $675,000 from federal estate taxes. Today, that amount has risen to $11.8 million. However, it doesn’t mean that it isn’t a good idea to establish a trust as they can provide benefits beyond a lower estate tax bill. For instance, putting assets in a trust means that they will be protected from creditors, which means that the asset stays in the family.
It can also allow a person with special needs to retain eligibility for government benefits. Finally, it means that a beneficiary may not have the chance to lose money because of a bad decision. The language of a trust can be as broad or narrow as a grantor wants it to be. A trustee will be assigned to ensure that the language of the trust is enforced. The trustee can either be a person or an entity such as a bank or similar type of firm.
Choosing an entity to oversee the trust may be ideal because the trustee is less likely to stray from the language in the document. However, whoever is chosen to act as trustee will need to remember that the money belongs to the trust. Furthermore, this person or entity will need to be in constant communication with the beneficiaries and other interested parties.
For many, trusts may be an important estate planning tool. This is because they may create financial flexibility today and for generations to come. One possible benefit is that parents and grandparents can provide for special needs children or grandchildren. They can also provide for others in the family based on their financial or other needs. An attorney may help an individual create a trust or review it as needed to determine if changes should be made.