Is making a lasting, meaningful, positive contribution to the world a goal of yours? How about doing something that you will be remembered for long after you are gone? It is a noble goal, but one that many people may not know how to achieve. One way to do so could be by including a legacy trust in your estate plan. This type of trust allows you to set assets aside not only for your children, but for your grandchildren, too. Depending on how it is structured, this trust may even provide for your great-grandchildren. Because it can be used as a legal mechanism for charitable giving, this type of trust also encourages beneficiaries to keep contributing to the causes you valued.
Take a moment to keep reading as we provide you with more information on this type of trust.
There are a couple of different ways to create a legacy trust. You could have your estate planning lawyer draft it as an irrevocable trust while you are still alive. In the alternative, you can also have your lawyer include provisions in your living trust that initiate a legacy trust when you die.
From a financial standpoint, there are several advantages to creating a legacy trust. One is that there are certain tax benefits. As long as the assets you use to fund the legacy trust do not exceed allowable limits, the trust will be exempt from certain taxes. Another practical and financial advantage is that the assets are usually shielded from creditors and judgments. Additionally, a legacy trust is generally immune from probate or court administration. The only exception is when assets are transferred at death.
The biggest disadvantage associated with this type of trust is that it is irrevocable. This means no one can change the terms once the trust is funded. Another drawback is that the person who creates the trust cannot act as the trustee. He or she must designate someone else to administer the trust.
Of course, this is not an exhaustive list. If you are interested in creating this type of trust, you should consult an experienced estate planning lawyer. He or she can review all of the pros and cons with you. Armed with this knowledge, you can make an informed decision about what is best for you. Our office is available to help you with all of your estate planning needs. This includes answering any questions you may have. Contact our law firm to arrange a free consultation, today.