While you might think that trusts are only for people that have quite sizeable estates, that is not the case. As a matter off act, the National Association of Financial and Estate Planning recommends trusts for estates with a wide variety of assets.
Trust Costs
The maintenance cost for a basic trust can vary. Generally it will be in the range of $1500 to $3000 depending on how complex you wish to go with the conditions. There will also be additional fees to administer the trust after you die.
Any amendments to the trust will also cost money. This is incentive to think carefully about what you want your trust to do.
Types of Trusts
While there are any number of trusts that are available, here are some examples of standard ones that have specific benefits:
- Credit Shelter Trust – This trust allows you to leave an amount of money up to the estate-tax exemption. Since the rest goes to your spouse tax free, it essentially allows you to double the amount of money that is left to your heirs untaxed.
- Generation-Skipping Trust – As the name implies, this allows you to leave money to beneficiaries who are two or more generations younger.
- Qualified personal residence trust – This type of trust allows you to remove the cost of your primary or vacation home from your estate.
- Irrevocable life insurance Trust – This trust allows you to remove the amount of your life insurance policy from your estate in order for your heirs to settle your affairs.
Make sure that you speak with a professional well-versed in trust and estate planning in order to decide what form of trust suits your desired purpose.
