Putting together an estate plan may not be a very exciting experience, but it is an important process. People can protect themselves and their family members through the creation of a comprehensive estate plan.
In addition to a will and living documents like powers of attorney, many modern testators decide to use trusts in their estate plans. There are many different types of trusts that can be used under a number of different circumstances, to facilitate a variety of different goals. The three scenarios below are among the most common reasons that those planning their estates in Louisiana decide to add a trust to their other estate planning documents.
They worry about taxes
While Louisiana does not assess an estate tax, the federal government does. If someone dies with property in their name worth a total of $12,920,000 or more, there will be very sizable taxes that apply to their estates. Trusts are a way of diminishing the personal holdings of an individual and potentially minimizing or eliminating estate taxes.
They worry about future collection activity
Perhaps someone has more debt than personal assets, which makes them worry that their creditors will lay claim to their resources and leave nothing for their dependent family members. Perhaps they believe that they may eventually require Medicaid benefits, which would trigger estate recovery efforts after they die. Both those with significant debt and those without the resources to pay for nursing home care later in life may benefit from the creation of a trust to protect their assets from collection activity in the future.
They have concerns about family matters
Personal issues can be as significant for testators as financial matters. Perhaps they have two children who resent each other and would likely challenge the estate plan in succession court in the hopes of getting more than their sibling. Maybe they have a beneficiary who might divorce in the future or who has a history of substance abuse. Using a trust to structure someone’s inheritance will give someone more control over the descent of their property and reduce the likelihood of a successful challenge against their testamentary documents.
There are plenty of other reasons why people choose to add trust to their estate plans. Thinking at length about one’s personal circumstances may lead to estate plans that better reflect one’s needs and less likelihood of future challenges for someone’s loved ones in Louisiana succession court.