Monday, January 24, 2011

TRUSTs That Your Family is Taken Care Of

By Arianna Capital

Trust needs will vary from individual situation to individual situation as there are different aspects of family that must be considered when deciding to begin these types of wealth management services. Below we have a common depiction of a scenario that was developed by our genius professional network. We will explain how it helps families go above and beyond their goals.

(Click to Enlarge)

The above picture describes multiple trusts formed after certain occurrences. They are useful for keeping wealth out of probate - a timely and expensive court process - and for passing benefits onto future generations of your family.

The first trust setup is generally a joint trust between husband and wife. This trust can begin to be contributed to during the lifetime or at death according to the will's of the trustees.

At the time of the husbands death in this example, the trust is split into two trusts so that we can begin to take advantage of the estate tax limits of both individuals. Half the wealth goes into the Husband's Estate and half goes to the Wife's Estate Survivor Trust of which the wife still has access to both trusts. Now, when the wife dies we can fully take advantage of both estate taxes. In 2011 this is 1,000,000 dollars. One million dollars from both the Wife's Estate Trust and the Husband's Estate Trust goes into exempt trusts for as many children as necessary forgoing probate and estate taxes allowing for more of your wealth to be passed on to your children so they can accomplish their goals in life.

The remaining in the Husband's Estate is now called Non-Generation Skip Martial Trust as it is no longer subject to generation skip tax and according to your will it can be passed on to younger generations and avoid this other tax. This trust and the rest of the Wife's Estate Trust may now be contributed to Non-Exempt Trust for children or grandchildren as to your will's description.

All this complex mumbo jumbo can be actually very beneficial for you and your family and should be looked into when developing a financial plan so that the road is easier and happier for those that come after you.

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