Estate Planning with Trusts

<p style&equals;"text-align&colon; justify&semi;">As people age&comma; creating a plan to handle what will happen to their homes after their gone becomes of the utmost importance&period; It’s never an easy conversation to have for a person and their families but creating a firm estate plan can save time&comma; money and heartache for those involved&period; There are a lot of questions that need to be answered when thinking about estate planning&period;<&sol;p>&NewLine;<p style&equals;"text-align&colon; justify&semi;">First&comma; it should be decided if the home is going to be sold and the money divided among heirs&comma; or if the home will remain in the family as it is&period; Who will it be deeded to&comma; if so&quest; Additionally&comma; it will need to be decided when this is going to occur&comma; should it happen at the time of planning or after passing&quest;<&sol;p>&NewLine;<p style&equals;"text-align&colon; justify&semi;">There are pros and cons of both staying in the home until passing and selling or giving the home before passing&period; Many seniors do prefer to age in their homes&comma; staying in place in their homes until passing&period; It provides comfort and familiarity in times where they may feel more vulnerable&period; These homes have been their home for nearly their entire adult lives in some cases&comma; something that isn’t easily emotionally disconnected from&period;<&sol;p>&NewLine;<p style&equals;"text-align&colon; justify&semi;">That said&comma; there are also advantages for those who do sell or give their homes early&period; Gifting the home early can help the seller qualify for Medicaid <a href&equals;"https&colon;&sol;&sol;plus&period;google&period;com&sol;u&sol;0&sol;102965134238573490288">Tevfik Arif<&sol;a>&comma; providing them with medical treatment and nursing care&period; This is especially helpful for those wishing to move to retirement homes for quality of life reasons&period; Gifting or selling the home early also provides substantial tax savings particularly when the home is valued under 5&period;49 million for a single person or &dollar;11million for couples&period; If the home value is above this&comma; putting the home in a Qualified Personal Residence <a href&equals;"https&colon;&sol;&sol;www&period;facebook&period;com&sol;TevfikArif-1914745745445104&sol;">Bayrock<&sol;a> can help reduce the estate tax liability as well&period; With this setup&comma; the home is transferred to an irrevocable trust but keep an interest for a term of years set by the homeowner&period; This setup works best for people who expect to live another 10 years or more&comma; as the longer the trust’s term&comma; the better the benefits for the heirs&period;<&sol;p>&NewLine;<p style&equals;"text-align&colon; justify&semi;">Since the IRS values the home using a formula that takes into account age based actuarial tables&comma; the length of the trust and the predicted interest rate on the date of transfer&comma; the home can be passed down for a deep discount over the homes market value&period; If the homeowner does pass before the trust’s term is over&comma; the home will be taxed at the current fair market value instead&period;<&sol;p>&NewLine;<p style&equals;"text-align&colon; justify&semi;">In both cases&comma; a general trust is recommended to be set up&comma; even when family member all seem to have no arguments or concerns over the will or designed estate plan&period; Unforeseen circumstances or simple disputes can boil over and cause issues within families&period; A trust can lower the estimated 5 to 15&percnt; of the estate that goes toward paying legal and probate fees&comma; and it allows the estate owner to pay these fees upfront&period; It’s fast and easy to distribute the estate with no beneficiaries having to attend probate&period; This trust will also cement who specifically gets what items&period; To get this trust set up&comma; a lawyer will need to be hired and a person within the family who will act as the trustee will need to be selected&period; This person should be responsible with good financial and organizational skills&period;<&sol;p>&NewLine;<p style&equals;"text-align&colon; justify&semi;">With some preplanning&comma; setting up one’s estate can be made easier and will avoid potential family conflicts&period; Starting early with estate planning sets a firm path for beneficiaries that will allow them comfort after a passing without adding additional stress&period;<&sol;p>&NewLine;