There are different trusts that are used to accomplish varying objectives. Sometimes people paint with a broad brush because they have a lack of information. In this post we will look at revocable living trusts in Indianapolis and wealth preservation.
Revocable Living Trust in Indianapolis
A revocable living trust in Indianapolis is just that, revocable. After you create the trust you are free to revoke or rescind it at any time. Assets that you have conveyed into the trust would once again become your personal property.
In addition to the above, even if you keep the trust intact, you can act as the trustee and the beneficiary while you are alive. You can direct investments, take distributions, and change the terms of the trust as you see fit.
This ongoing control is appealing on the one hand. On the other hand, because of this control you do not gain some of the benefits that people may typically expect from trusts.
Assets that have been conveyed into a revocable living trust would be looked upon as part of your taxable estate by the Internal Revenue Service. You are not protecting wealth from taxation by placing it into a revocable living trust.
In addition, assets that have been conveyed into a revocable living trust are not protected from claimants or creditors.
Given the fact that the trust will not protect assets, you may wonder where the value lies.
Revocable living trusts facilitate the transfer of assets outside of the legal process of probate. When you use a will rather than a trust to transfer assets, the estate must be probated before the heirs receive their inheritances. This process can be quite time consuming and expensive.
Irrevocable Trusts in Indianapolis
There are trusts that will protect family wealth; these would be irrevocable trusts.
You surrender incidents of ownership when you create an irrevocable trust. You don’t have that same control. You cannot revoke the trust or make changes any way you see fit at any time.
Because you do relinquish personal control of the assets, resources that have been conveyed into this type of trust may be excluded from your taxable estate. They may also be out of reach of litigants seeking redress.
For example, the irrevocable trust called a generation-skipping trust is frequently used to protect family wealth.
Wealth Preservation Consultation
If you want to preserve wealth for the benefit of your loved ones you have options. We would be glad to provide you with a free consultation if you would like to learn about wealth preservation strategies.
You can get in touch through the contact page on our website if you want to schedule a consultation or ask a specific question about trusts or any other estate planning matter.
Mr. Kraft assists clients primarily in the areas of estate planning and administration, Medicaid planning, federal and state taxation, real estate and corporate law, bringing the added perspective of an accounting background to his work.