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Trust-Based Plans

The “Trust-Based” Plan is the most efficient plan for anyone with minor children, anyone who owns real estate, or anyone that owns their own business.  The trust-based plan accomplishes the same goals as the “Will-Based” plan, by allowing you to choose the person that will manage your affairs and indicate who should receive your assets, but it has the added benefit of ensuring privacy throughout your incapacity and death, avoiding Probate (a lengthy, public, and costly court process), and allowing flexibility with asset management for minor children, elderly parents, and pets.


Benefits of a Trust-Based Plan

  1. You select the the person that will manage your affairs after your death (trustee/executor)

  2. You designate a guardian for your minor children and/or dependents

  3. You designate the beneficiaries that you want to receive your assets

  4. You appoint the person that you would want to make health care decisions on your behalf if you are incapacitated

  5. You appoint the person that you would want to act on your behalf for financial matters if you are incapacitated

  6. You indicate the type of treatment that you would want regarding life support and your desires regarding organ donation

Additional advantages of Trust-Based Plan Over a Will-Based Plan

  1. Avoids Probate, a lengthy court process (this can take 12-18 months, during which time, assets are frozen)

  2. Elimination of the significant costs and fees associated with the Probate process. These fees are set by law and are based on the gross estate that you leave behind. (e.g. $14k in fees for an estate worth $200k, $26k for an estate worth $500k, $46k for an estate worth $1M)

  3. Ensures private handling of your estate (as opposed to a public court process). If you would prefer that your financial matters be kept private, a trust-based plan can accomplish that.

  4. Allows for increased flexibility in managing assets (particularly useful if the beneficiaries are young or are not experienced with handling money), reducing the likelihood that the wealth will be squandered or used imprudently. For example, if you have minor children, would you want them to receive outright distributions of their full inheritance at the age of 18? You may prefer to limit how their inheritance is used, such as for education, or structure a plan for them that involves distributions at certain ages (such as 25, 30, and 35 years old), or upon certain milestones, such as graduating from college.

  5. A trust-based plan allows for creditor protection. If there is any concern around the inheritance that your beneficiaries are to receive being taken away by their creditors, a trust-based plan will be more appropriate to safeguard those assets. A trust can be designed so that judgment creditors of your beneficiaries cannot access the funds in the trust.

  6. Trusts can be used to minimize taxes and preserve family wealth.


A Trust-Based plan includes the following documents:

  1. Revocable Living Trust

  2. Pour-Over Last Will and Testament

  3. Durable Powers of Attorney for Finances

  4. Advance Healthcare Directive

  5. HIPAA Authorizations

  6. Nomination of Guardian

  7. Documents to facilitate the asset transfers into your trust

For those whose estates are large enough that they may be subject to estate tax, I offer additional advanced planning in order to preserve family wealth and minimize taxes.

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