Trusts can facilitate tax planning, charitable giving, asset protection and provide for generations, if drafted properly.
Trusts can be very simple or extremely complex, depending on one’s needs. Trusts can be used to transfer assets to multiple generations or even benefit a favored pet. Trusts can protect retirement accounts, incapacitated adults or spendthrift children. When a dependent family member has a chronic illness, a developmental disability or medical condition that interferes with employment, a special needs or supplemental needs trust is important to ensure the long term support and care of the loved one. A special needs trust can even be used to assist a family member or loved one with a severe problem with drugs or alcohol. It is extremely important that the trust contain proper provisions to ensure that eligibility for governmental assistance or benefits is not jeopardized in either event. Trusts can facilitate tax planning, charitable giving, asset protection and provide for generations, if drafted properly. Trusts are useful estate planning tools when dealing with ex-spouses when minor children from a previous marriage are involved or even difficult in-laws. Trusts are used to funnel income to a charity for a number of years with the remainder to family members or income to family members for their lives with the remainder to a designated charity. Use of trusts can be a great tax-planning strategy or a way to protect assets from unscrupulous creditors. Trusts can be used to protect life insurance from estate taxation. Some people are concerned about their children not having enough incentive to work if they are left with too much money, even if it is doled out through use of a trust. Incentive trusts are wonderful tools to use, if this is a concern. If one is concerned that their spouse may be the victim of a gold digger or fast-talking telephone solicitor, then a testamentary trust may be in order. Selection of the proper trustee will ensure that trust assets are not wasted or vulnerable to outside interests.
As to trust administration, when one is named as a trustee of a trust, this is a true honor and a great responsibility. The Georgia trust code now requires reporting by a trustee, unless otherwise excused by the trust document. For certain trusts, it is important to notify the beneficiaries when a gift is made to the trusts. Trust administration can be tricky, but can be easily negotiated with the assistance of an attorney experienced in these matters. Can the trust be modified, revoked or terminated? How does a trustee resign and what are the responsibilities of a successor trustee? It is important to get the advice of a qualified trust attorney to get answers to these questions. A trustee has the duty of equal loyalty to all beneficiaries. An objective advisor can steer the trustee in the right direction to avoid future problems with trust beneficiaries.
If one is lucky enough to be a beneficiary of a trust, it is important not to alienate the trustee, but it is also important to receive what is due. Negotiating through the various options of trust distributions is possible with trusted counsel.