When you die, your assets will wind up in probate, costing your loved one’s money and time when they should be grieving. If, however, you have a trust, then you can keep your assets out of the hands of a court-supervised guardianship and out of probate court. This benefit alone is good enough reason to have a trust drawn up for your beneficiaries.
But trusts are not all the same. An ill-advised or ill-constructed trust can do more harm than good. You need an experienced attorney in Indiana who knows how to devise a trust in accordance with the law and your specific wishes. Guy DiMartino, trial lawyer in Michigan City, understands trusts, understands their importance, understands how accidents or death can happen unexpectedly, and understands how best to craft effective trusts that can save your beneficiaries time and hassle. Contact Guy DiMartino Law today.
WHO SHOULD GET A TRUST IN INDIANA?
Anyone with any amount of assets can benefit from a trust; trusts are not only for the wealthy. Below is a sample of who a trust can benefit in Indiana.
- Single people — if you have assets totaling $50,000 or more titled in your name alone, then a trust can provide beneficiaries the benefit of your assets without the hassle of probate court. The reason why there is a $50,000 threshold is that estates that have net assets of $50,000 or less do not have to be probated and the property can transfer by affidavit under Indiana’s small/summary estate process.
- Married couples — a trust will not only keep your beneficiaries out of probate court, but it can also benefit you with regard to estate taxes; Indiana does not have an estate tax but the federal estate tax still applies, and trusts can be set up in ways to maximize federal estate tax exemptions.
- Married, but in second or later marriage — you and your spouse may have children or grandchildren from previous marriages, so you will want to make sure they are all accounted for according to your wishes, and a trust can do that.
Regardless if you are married or single, you will want a trust if you want to keep your estate private. A trust is a private contract and as such, it is not for public consumption. On the other hand, if your estate goes to probate court, it becomes part of the public court record and anyone can have access to the information. You will also want a trust for things like:
- You own land in another state;
- You have minors dependent on you; or
- You want to make sure any mentally handicapped person you know — family or not — is cared for after your death.
WHAT TYPES OF TRUSTS ARE AVAILABLE IN ESTATE PLANNING?
A living trust can be either revocable or irrevocable.
- A revocable trust is one that allows you to maintain control of the assets in the trust — you have the ability to revoke or alter the terms of the trust at any time so long as you are living.
- An irrevocable trust is one that does not allow you to alter or modify the terms because the assets are no longer yours to control.
- A pet trust is a trust that is set up for the benefit of your pets that are living if you are incapacitated or pass away.
There are other trusts, too, that are more complicated and are designed for specific purposes. Your attorney will review your assets, your wants, and your circumstances and advise you of any other applicable trust that may be relevant and desired in your unique situation.
WHAT ARE THE KEY TRUST TERMS YOU SHOULD KNOW?
- Asset Protection Trust. Takes possession of assets to protect them from future liability.
- Beneficiary. The person benefiting from a trust.
- Intervivos trust. A trust that takes effect while the settlor is alive.
- Marital trust. A trust between a marital couple that may provide some creditor protection.
- Pourover will. A type of will that instructs — upon the person’s death — the transfer of certain assets into a trust.
- Settlor. The person creating a trust, also known as a grantor or trustor.
- Spendthrift clause. A clause that prohibits the beneficiary from selling or giving away his or her interest in the trust and prevents creditors from obtaining the beneficiary’s interest.
- Testamentary trust. A trust created by a will and takes effect after the settlor dies.
- Trust. A fiduciary arrangement between a settlor and a trustee whereby the settlor transfers ownership of assets to the trustee and the trustee controls the assets for the benefit of a beneficiary.
- Trustee. The person or entity who controls the assets in a trust and distributes it in accordance with the terms of the trust.
HOW DO I CREATE A TRUST IN INDIANA?
You can create your own trust simply by naming a trustee and writing down what assets you want to be transferred in trust to a beneficiary and then have it notarized. But self-made trusts can be problematic and not fully address what your intentions are. These kinds of trusts can be vague and unclear. Minus certainty, legal issues can arise that cause headaches and unintended legal expenses later.
As it is, law involving trusts can get complicated quickly. Having an attorney create a trust that is in accordance with the law, that maximizes the benefits by using the law, and that addresses all your wishes, concerns, and expectations is the ideal scenario. Contact Guy DiMartino to make sure the trust you want is the trust you get.
HOW DO I CHANGE A TRUST IN INDIANA?
If you have a revocable living trust, then it may need to be updated and modified from time to time. The reasons may be legal or personal in nature. If you retained a lawyer to administer your trust, then consult with your attorney every few years or so to determine if changes are warranted. If so, your attorney will make those changes for you.
Altering a trust can be problematic if not done correctly, so retaining the same lawyer who knows your circumstances and drafted your trust in the first place will be key to successful modifications.