Many people see trusts as confusing and even intimidating documents. There are many different types of trusts and each one has a different purpose and its own set of terminology. However, trusts have an elegant simplicity, and we genuinely enjoy teaching our clients about the various types of trusts and how they can accommodate their goals, especially as they relate to estate planning.
A trust is basically an arrangement whereby one person agrees to hold property for the benefit of another. Trusts can be used to hold money for minors, forestall spendthrift family members, benefit a charity of choice, protect assets from former spouses or creditors, avoid probate and reduce estate taxes upon the trustmaker’s death, and even make provisions to care for pets.
Below are three common types of trusts (there are dozens more):
Life insurance trusts. An irrevocable life insurance trust lets you keep the death benefit of your life insurance policy outside of your estate (and out of probate), which means your life insurance proceeds will not increase your estate tax liability. In fact, you can design your life insurance trust to be applied toward your estate tax liability, leaving more of your actual wealth for your heirs.
Irrevocable gift trusts. You can give beneficiaries access to gifted funds according to the standards you set. For example, you can decide at what future time or age a beneficiary will receive your gift. These trusts can even continue for multiple generations if that better accommodates your goals.
Revocable living trusts. Although revocable living trusts are still part of your taxable estate, they do help you efficiently transfer wealth to your heirs and help them avoid the probate process.
Should I wait until after the holidays to get a divorce?
Although attorneys primarily advise on the law, occasionally our clients seek advice of a much more personal nature. This question is a perfect example of that. Decades ago, there were frequent benefits that could be had by timing when you file for divorce (often resulting in a race to the courthouse to be the first to file).
There still remains a few benefits by being the first to file. For example, if you separated from your spouse more than three months ago and he or she has relocated outside of the county, then he or she can file in his or her new county (or state) and you might be forced to litigate your divorce in a different county or state.
Every once in a while, I get a more specific question like the one posed here where a client is debating waiting until after the holidays to file. I am not going to provide a yes or no answer in this blog, but I will provide you with the information that will hopefully aid you in making that decisions.
First, consider how this may or may not affect your family plans. If you have children, there is no question that the decision to file divorce immediately preceding the holiday season will like result in a disruption to your plans and their Christmas. If you file early November, chances are relatively high that you can have an order from the Court before Christmas that will spell out the details of Christmas parent time. To be honest, if you don’t have children I can perceive little, if any, benefit from waiting until after the holidays.
Second, are you already separated? If you are already separated from your spouse, we generally advise clients it is better to file now rather than later (there are exceptions to this “general rule”). This would apply regardless of the upcoming holidays.
Third, are there any reasons to rush into this? If you are the first to file, that means you are going to be stuck paying the filing fee. However, if your spouse financially supports you, then you might be in a bit of a rush to file and get some temporary alimony to help you pay your bills.
Free Consultation with a Trust Lawyer
If you are here, you probably have a trust issue you need help with, call Ascent Law for your free trust consultation (801) 676-5506. We want to help you.
8833 S. Redwood Road, Suite C
West Jordan, Utah
84088 United States
Telephone: (801) 676-5506