When you hold an IRA, those funds can be distributed to the person you name as the beneficiary or to an inheritance trust. Some IRA owners choose a trust because it gives them a degree of control over how the assets are distributed after they die. Before you name a trust as the beneficiary of your IRA, however, consider the pros and cons. Designating a trust as beneficiary can be useful if the intended beneficiary has
A Spousal Lifetime Access Trust (SLAT) is an estate planning tool that can be used to lock in the current estate tax exemption while still allowing a certain degree of access to trust assets. SLAT basics A SLAT is an irrevocable trust created by one spouse for the benefit of the other. The gift removes assets from your estate but allows your spouse to access the trust. It provides you with indirect access to the funds
If you are the beneficiary of a trust, it may feel like you are at the mercy of the trustee. But depending on the type of trust, trust beneficiaries may have rights to ensure the trust is properly managed. A trust is a legal arrangement through which one person, called a “settlor” or “grantor,” gives assets to another person (or an institution, such as a bank or law firm), called a “trustee.” The trustee holds legal
The New Hampshire Bar Association recently published an article written by Attorney David M. Beliveau discussing the use of Medicaid irrevocable trusts as a legal tool to protect assets (typically, a residence) in the case one has to be admitted to a nursing home and apply to receive Medicaid to cover the respective cost. The question is, do such trusts work? Read the entire article below. Elder, Estate Planning & Probate Law: Medicaid Irrevocable Trusts: A
When dealing with irrevocable trusts the ability to effect change can be difficult to understand, presenting more questions than answers. The correct answers often depend on a variety of factors, but a good starting point is state law and the trust document itself. When modification or termination of an irrevocable trust is sought, a possible mechanism is for the trustee or beneficiary to seek a court order.
Buried in a new federal law is a tiny change that will now allow individuals to set up their own special needs trusts. The sum total of the change is two words — “the individual” — intended to correct a more than 20-year-old error. The change is called the Special Needs Trust Fairness Act. Authorized under the Omnibus Budget Reconciliation Act of 1993, special needs trusts protect assets and allow an individual to maintain eligibility for
An estate planning technique that was very popular some years ago is still present in many people’s wills, especially if they haven’t reviewed their estate plan in a while. But this technique – called a “bypass trust” – might now actually increase taxes rather than decrease them for many people, as a result of changes in the law in the last few years. If you haven’t reviewed your estate plan recently, now is a good time.
It’s important to review a revocable trust regularly to see if any amendments are needed, such as when something changes in your life or if the law changes. There are two ways to go about it. You can either amend the existing trust to change a certain part of it or rewrite the whole trust, which is known as a restatement. While you might expect that an amendment is easier and more cost-effective, that’s not always
People who set up trusts for children, grandchildren and other family members have a greater ability to limit the beneficiaries’ right to challenge trustees’ decisions in court, as a result of a new U.S. Tax Court decision. Here’s the background: You may know that you can give up to $14,000 a year to any person without incurring the federal gift tax. But that rule generally doesn’t apply if you put the money in a trust for
A trustee has two important duties – managing the assets in the trust, and distributing them to the beneficiaries according to the donor’s wishes. But it can be hard to find one person who can do both things well. An aunt or uncle might be the perfect person to know how to distribute assets to family members, but might not have a lot of financial acumen. An investment advisor might be very skilled at growing the
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