Trusts and IRAs

A number of years ago I used to write an “Answers” article for a local newspaper. I was looking at some of those old articles recently and realized how little some things have changed in the last 10 years. Even though I tend to gravitate to the new and more interesting topics, some of these old questions still have a great deal of relevancy to clients today.

Several of those old articles dealt with those types of topics. For instance:

Who should have a living trust?

I am often told by clients that they do not need a living trust because their estate is too small.

While it is true that living trusts are valuable tools for the reduction of estate taxes in larger estates (more than $5 million), living trusts are also useful for avoiding probate and providing for assistance in the management of your assets in the event of your disability.

In fact, a small estate can less afford the expense of probate, so having a living trust to avoid probate is arguably more important in a small estate than in a more substantial estate.

In addition, because estate tax laws have changed so that only a very few estates are subject to tax, many people with substantial estates still find that utilizing a trust makes a lot of sense.

One of the things I emphasize with my clients is what are their concerns for the future of their children? Are there ways of structuring the transfer of assets to the next generation that will take into account some of those concerns and supply solutions to some potential problems?

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