Titling Assets in Revocable Trusts
Though they’re not as hard to change as irrevocable trusts, Minnesota revocable trusts might not be the best choice for all of your assets.
What you’ll learn in this article is about what assets might not best fit into a revocable trust. While trust law may allow you to put most things into a revocable trust, that doesn’t mean that you should put everything that you own inside them. You may not lose your ownership instantly, but you will eventually lose your ownership of the items contained in this kind of trust eventually. Trust law can also change from state to state. That said, this will give you some info of what you should be aware of.
Modifying Life Insurance
This is a bit of a tricky one. Sure, there’s the possibility that you can make someone as the trustee for a life insurance policy. There’s just a bit of concern that things might get a tad complicated or something bad could happen. You should run this one by your lawyer because it may actually cause harm to your estate planning goals.
What you want to do, especially if any involved party moves to a different state, is find out if your state will still provide creditor protection once the trust is in place. Move before you try messing with your life insurance policy or at least, check how each state handles trusts and any estate planning you have or will have set in place. Let this be a reminder that estate planning laws can change from state to state, causing a simple move may lead to unanticipated consequences.
Uniform Transfers to Minors Act and Trusts
Your revocable trust is not the place to be putting Uniform Gifts or Uniform Transfers to Minor Accounts. For the uninitiated, these are two different things that can be set up for the benefit of a legal minor. Whenever a minor is involved in your estate planning goals, you may have to take a few extra precautions. For example, leaving your grandchild some extra cash may mean that you need to give it to them in a more specific way. You may even want to put that money into a trust for their later college tuition.
Unlike some other choices, Uniform Gifts and Transfers to Minor Accounts are specifically designed to get gifts into the minor’s hands. That is, they’re considered the owner of any accounts given to them. A custodian can watch over all the accounts that are given, but they’re not the ones who will wind up with the accounts. The kids take all.
Updating Your Current Wills
Timing might be something that you want to consider when making your revocable trusts. For those of you making updating or making your will alongside of living trusts, be serious about what should go into each one. One deciding factor should be whether or not you want your heirs to inherit sooner than later. A living trust might mean that whoever you’re giving to shall get those assets sooner than if they were in a will.
It’s fine if you no longer need those assets. That’s just something to be aware of. Actually, as a side note, you may even want to consider going with an irrevocable trust for the property that you no longer need. That kind of trust nullifies your ownership and transfers it to someone else. A revocable trust will transfer the ownership, but not as quickly.
Trusts and Taxes
Going back to the fact that you’ll still own stuff inside of your revocable trust, you’ll probably still be taxed on whatever you put inside. Sure, putting something in one of these trusts lets you give it to someone else later on, but until it passes, you’re still legally obligated to pay the taxes associated with it. In a broader sense, if you don’t want to take care of something, don’t put it into a revocable trust.
The best answer will probably be an irrevocable trust. Once you sign over the assets, they’re somebody else’s problem. Even though you might want to use a revocable trust because it will pass your assets to someone else sooner than a will might, you still might have to manage the assets. You can’t really blame the other party for not managing something they don’t legally own if it’s not their responsibility. For all they know, you may want to keep the asset as long as you can.
Minnesota Trust Lawyers
Now that you have a better idea of what not to put into a revocable trust and what to put into a irrevocable trust, maybe it’s time to work on some of your estate planning. You can get help with that at Flanders Law Firm LLC. Call the firm today at 612-424-0398.
here are plenty of specifics for all the different kinds of assets that you can put into trusts. So, have a trust lawyer tell you what options are best for you. You might find that some assets are actually better suited for being in a revocable trust after all.
