Using Trusts in Your Wisconsin Estate Plan
Trusts provide added flexibility for your estate plan and allow your loved ones to avoid the probate process. Learn more about the benefits of trusts and the types of trusts that are available in Wisconsin.
Many people are generally familiar with the concept of a trust, but do not fully understand how using trusts can be beneficial for their estate plan. Trusts provide a number of important benefits under the right circumstances, and if you are preparing to plan your estate, you are right to be thinking about trusts as part of the process.
At Crooks Law, we provide personal, detail-oriented legal advice and assistance for estate planning in North Central Wisconsin. We can help you understand your options and make informed decisions about using trusts in your estate plan. To learn more about the benefits of the different types of trusts and how you can use trusts to gain added flexibility and protect your loved ones, we invite you to schedule a confidential consultation with one of our experienced estate planning attorneys.
Why Use Trusts for Your Estate Plan?
A will is the most traditional form of an estate planning document. Wills serve a number of purposes – and they continue to be an important estate planning tool for most individuals – but they have certain drawbacks as well. One of these drawbacks is that wills are administered through the probate process.
Probate is a judicial process that involves a number of steps that must be managed by an executor, with the help of an attorney experienced in estate administration. While these steps are usually fairly routine, they can take months – sometimes a year or more – and the property in the estate cannot be distributed until the process is complete. The amount of time involved means that probate can become relatively expensive as well.
Using trusts allows your loved ones to avoid the probate process, with regard to assets in the trust. When you use a trust for estate planning purposes, the trust becomes the legal owner of your assets. As a result, when you die, the assets in the trust have already been transferred out of your name. The trust documents will specify who becomes the trustee (and beneficiary) upon your passing, and he or she (or it, if you leave property to a charitable organization) will essentially step into your shoes without the need to probate your estate.
Other potential benefits of using trusts for your estate plan include:
- Avoiding issues with regard to guardianship and financial decision-making
- Easier management of assets and income during your lifetime
- Increased privacy, due to avoiding probate
- Reduced estate taxes
Types of Trusts
While there are many different types of trusts, most people are able to use one (or a combination) of three specific types. These are: the revocable trust (or “living trust”), the irrevocable trust, and the special needs trust.
Revocable Trusts (“Living Trusts”)
With a revocable trust, you maintain control over any assets that you assign to the trust while you are alive. Then, upon your death, the person who you named as the successor “trustee” takes over. While the revocable trust is easily the most popular form of estate planning trust, it does have certain limitations. For example, establishing a revocable trust can create added burdens for buying and selling trust assets during your lifetime. Nonetheless, this remains the preferred estate planning tool for many individuals.
As their name suggests, irrevocable trusts cannot be terminated once they are established. While this may sound undesirable, there are actually a number of situations where using an irrevocable trust makes the most sense. Irrevocable trusts are most commonly used for the purposes of tax planning and asset protection, and there are several different types that you can use, depending on your specific circumstances and goals.
Special Needs Trusts
If you have a family member with special needs who receives assistance through Medicaid, Social Security Income Disability (SSID), or another government benefit program, transferring assets to him or her upon your death could put these benefits at risk. Special needs trusts are specifically designed to avoid this issue. With a special needs trust, you can cover the cost of life-enhancing services and activities for your loved one, without jeopardizing his or her government benefits.
Contact Crooks Law Today to Speak with Estate Planning Lawyer in Wausau, WI
With offices in Wausau, WI, Crooks Law provides estate planning services to individuals and families throughout North Central Wisconsin. If you would like to discuss using a trust as part of your estate plan, contact us online or call (715) 842-2291 to schedule a consultation today.