Should I Form A Trust?

The advisability of forming a trust depends on your exact situation. Under certain circumstances, use of a trust can be an effective method of safeguarding assets and/or an income stream for your heirs, while minimizing your estate tax and probate costs. However, these benefits must be weighed against the costs of setting up and administering these trusts for the years involved. Any of the tax advantages that can be gained by using a trust are obtainable without a trust. So no one should form a trust ONLY for tax advantages.

However a trust will permit you to easily split the benefit of your assets between more than one heir, as well as provide for professional management of the assets. This can be important if you have an heir you wish to benefit, but feel they may not be able to handle the assets.

If you have a "taxable" estate, one that is more than $1,000,000 in net value, or if you have unusual circumstances whereby you want to protect assets earmarked for your heirs, it may be wise to speak to an estate planning attorney for guidance. The unified credit is currently $345,800.

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