We all know that a last will and testament can be helpful when it comes to making sure that certain pieces of property are kept where they belong: in your family. You can write your will to designate certain assets to go to certain individuals or entities. You can leave everything from your mom’s diamond ring to your antique car to whomever you’d like.
But, there is more to estate planning than just wills and trusts. This area of law can be complex when it comes to asset designation and even your own medical wishes. Speaking with an attorney who is knowledgeable in the area of wills and trusts Phoenix can be helpful when determining how to set up your estate plan. However, when it comes to estate planning and keeping certain assets in your family, many people turn to revocable living trusts. And while this is a great part of your estate plan, there are a few things that a revocable living trust does not do.
If you implement a revocable living trust to help retain your family home, for example, understand that this trust does not offer the same protection as a living will. In other words, a living will control your medical decisions, while a living trust only controls your assets. Your living will outlines who you would like to make medical decisions on your behalf when you’re unable to do so. It can also outline your wishes as to whether you would like to remain on life support if and when the time comes.
No Protection from Creditors
While you are still alive, a living trust does not protect your the assets you place in the trust from any creditors. This is because the trust is revocable, and therefore you remain in control of your assets because you still have access to all of them. However, once you pass away, any assets that remain in your trust are protected from the creditors of your beneficiaries.
No Effect on Income Taxes
Any assets placed in a living trust that earns an income must still be reported as income each year, and taxes are due on that income. If the trust was irrevocable, it’s possible you could save on taxes.
Keeping your home and other assets in the family takes a detailed estate plan, and because each family has different circumstances and assets, it’s best to consult with experts who can sit down with you and take the time to help implement your plan. If an estate plan is something you desire, please reach out to our team today. We can sit down with you and review your assets and all of your wishes in order to determine the right estate plan for you. No one ever said talking about what will happen after your death is easy, but having a plan in place is certainly going to benefit those you love. Reach out to us today for more information on estate planning.