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When to incorporate a trust in an estate plan

When you begin the estate planning process, you can explore many options available to help you achieve the goals you have in mind. Oklahoma law does not specify what legal documents you must include or omit from your portfolio. You can execute your estate plan as you wish and can change and update it as needed, except in certain circumstances, explained later in this post.

One of the legal documents you may want to consider incorporating into your estate plan is a revocable trust, otherwise known as a “living trust.” This type of trust enables you to ensure the management of your assets according to your wishes. You can set parameters for how and when someone can use or distribute assets contained in the trust, as well as who the beneficiaries of the trust will be.

Assets held in trust as part of an estate plan do not pass through probate court

One of the greatest benefits of executing a revocable trust is that the assets you place in trust are not subject to probate after you die. Assets you have listed in a last will and testament, on the other hand, must pass through probate for verification and distribution. Another benefit of initiating a trust is that the contents of the trust and names listed as beneficiaries are private. Your will is a matter of public record.

Placing assets in a trust fund may help your heirs and beneficiaries avoid certain taxes when you die. When taxes apply, it often reduces the overall value of an inheritance. In this case, however, when there is a trust in place, one cannot use the assets to pay taxes against the estate.

Retaining control over the gift you want to give

When you sign a trust, a person designated as the trustee will oversee and manage the fund. Implementing a revocable trust enables you to retain control over the gift you wish to provide to someone as an inheritance. For example, if you are setting monies aside to pay for your grandchild’s college tuition, you can include specific instructions stating that the beneficiary must be a certain age before accessing the funds or must use the money only to pay for a higher education.

Do you have a loved one with special needs?

A trust is a valuable tool to provide for a loved one with special needs after you die. If your loved one applies for government assistance, he or she cannot count monies placed in a special needs trust as income. No matter how much money is in the trust, it cannot create ineligibility for medical assistance or other government-funded programs like Supplemental Security Income.

Your estate plan is an open book that you may arrange as you see fit. If you think that adding a revocable trust to your plan is beneficial, you’ll want to discuss your goals with someone who is familiar with Oklahoma estate planning laws