![]() Keep in mind that each state where assets are held in title of the decedent will need to be probated, resulting in additional costs.Īlso, a will is a public document that could be scrutinized or contested, as well as give the public access to information that you might wish to keep private. Lauray: The probate process can be lengthy and potentially costly. ![]() This could create problems if you need to complete financial transactions with outside parties who have trouble accepting or even refuse to accept the power of attorney. If you're incapacitated, a will has no legal effect, so any health care or durable powers of attorney you might have in place will guide any decisions made on your behalf. George: A major limitation of wills? You have to die first. You can also structure trusts to protect the beneficiaries from creditors, manage their state income taxes and/or preserve the generation-skipping tax exemption. ![]() For example, you can appoint a trustee to help assist beneficiaries who may struggle to manage their bequest. They're also extremely flexible in terms of how you deploy them. Anyone concerned about facing a stroke, dementia, or Alzheimer's may want to consider using a trust to ensure their resources are preserved, managed, and spent in line with their wishes while they're under the care of a loved one or health professional. George: A trust not only identifies who may benefit from trust resources but also defines how and when, including in cases of incapacity. (For more on that, see Will Taxes Rise for the Wealthy?) Taxes may be especially top of mind these days, as Congress considers lowering the gift and estate tax exemption. ![]() On top of that, there are dozens of special-use trusts that could be established to meet various estate planning goals, such as charitable giving, tax reduction, and more. A trust allows you to be very specific about how, when and to whom your assets are distributed. wealth consultant with Schwab Private Wealth Services in Westlake, Texas and George Pennock, director of tax, trust, and estates for Schwab Wealth Advisory in Henderson, Nevada.īrad: In a word: specificity. To learn more about the benefits and drawbacks of trusts, as well as the ways in which Schwab can help clients work through their estate-planning needs, we talked with three Schwab professionals: Brad Reeves, an assistant branch manager in Austin, Texas Lauray Kennedy, a sr. So, it makes sense to do some planning beforehand. The kind of assets included in the trust and the complexity of the distribution strategy can also affect pricing. That said, the bill can add up quickly if you and your attorney need to spend a lot of time discussing your goals before the trust agreement is drafted. For example, you can use a trust to transfer property, help minimize estate taxes, preserve assets for minors until they are adults, or benefit a charity.Īnd while trusts have a reputation for being expensive, some attorneys offer a basic trust package for a flat fee. Trusts can be arranged to accomplish a variety of different goals. In contrast, wills take effect only upon death and typically need to be authenticated by a probate court, which can take time and involve additional costs. They can be structured to take effect before death, after death, or in case of incapacitation. Wealth and Investment Management SolutionsĪ trust is a fiduciary arrangement that specifies how your assets are to be distributed, usually without the involvement of a probate court.Meet the experts behind Schwab's investing insights.Environmental, Social and Governance (ESG) Investing.Bond Funds, Bond ETFs, and Preferred Securities.ADRs, Foreign Ordinaries & Canadian Stocks.Environmental, Social and Governance (ESG) ETFs.Environmental, Social and Governance (ESG) Mutual Funds.Benefits and Considerations of Mutual Funds.
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