Estate planning attorney in Boise and Nampa ID: Types of trusts

An estate planning attorney can help you maintain a trust

Estate planning attorney in Boise and Nampa ID can help you open and maintain a trust for your dependents. A trust is a legal tool that can help you plan your estate and protect your assets. A trust is a relationship between three parties: the grantor, the trustee, and the beneficiary. The grantor is the person who creates and funds the trust with their assets. The trustee is the person or entity who manages the trust according to the grantor’s instructions. The beneficiary is the person or entity who receives the benefits of the trust.

There are many reasons why you may need a trust, depending on your goals, circumstances, and preferences. Here are some of the most common ones:

• Avoid probate. Probate is the court process that oversees the transfer of your property after your death. Probate can be expensive, time-consuming, and public. A trust can help you avoid probate by transferring your assets to your beneficiaries without court involvement.
• Reduce taxes. A trust can help you reduce or eliminate various taxes, such as estate taxes, income taxes, gift taxes, and generation-skipping transfer taxes. A trust can also help you take advantage of tax exemptions and deductions that may not be available otherwise.
• Control your assets. A trust can help you control how, when, and to whom your assets are distributed. You can set up rules and conditions for your beneficiaries to receive their inheritance, such as reaching a certain age, completing education, or passing a drug test. You can also protect your assets from creditors, lawsuits, divorce, or Medicaid claims.
• Provide for special needs. A trust can help you provide for a loved one with special needs without jeopardizing their eligibility for government benefits. A special needs trust can pay for expenses that are not covered by public assistance, such as medical care, education, recreation, and personal items.
• Support a charity. A trust can help you support a charitable cause that is important to you while also benefiting yourself or your family. A charitable trust can provide you with income tax deductions, estate tax savings, and income for life or a term of years. You can also specify how the charity will use your donation.
• Plan for incapacity. A trust can help you plan for the possibility of becoming incapacitated due to illness, injury, or age. A trust can allow your successor trustee to manage your assets for your benefit without having to go through a court-appointed conservatorship.

In Idaho, there are four main categories of trusts: living trusts, testamentary trusts, revocable trusts, and irrevocable trusts.

Living Trusts

A living trust is a trust that is created and funded by the grantor during their lifetime. The grantor can name themselves as the trustee and beneficiary of the trust, and also designate successor trustees and beneficiaries who will take over the trust management and assets after the grantor’s death or incapacity. A living trust can hold almost any type of asset, except for retirement accounts such as IRAs, 401(k)s, and Keoughs.

The main advantage of a living trust is that it allows the grantor to avoid probate, which is the court process that oversees the transfer of property after death. Probate can be costly, time-consuming, and public. A living trust can also provide more privacy and control over the distribution of assets to the beneficiaries.

Testamentary Trusts

A testamentary trust is a trust that is created by a will and funded by the estate of the deceased person. The will specifies the terms and beneficiaries of the trust, and appoints a trustee to manage it. A testamentary trust can be used for various purposes, such as providing for minors or special needs individuals, or delaying or staggering the inheritance of beneficiaries.

The main disadvantage of a testamentary trust is that it is subject to probate, which means that it has to go through the court system before it can be implemented. Probate can delay the distribution of assets, incur fees and expenses, and expose the trust to potential challenges or disputes.

Revocable Trusts

A revocable trust is a trust that can be changed or canceled by the grantor at any time during their lifetime. The grantor can add or remove assets, beneficiaries, or trustees as they wish. A revocable trust can also be converted into an irrevocable trust by the grantor’s choice or by law.

The main benefit of a revocable trust is that it offers flexibility and control to the grantor. The grantor can adjust the trust according to their changing needs and circumstances. A revocable trust can also avoid probate and provide privacy and continuity for the beneficiaries.

Irrevocable Trusts

An irrevocable trust is a trust that cannot be changed or canceled by the grantor once it is created. The grantor gives up all rights and control over the assets transferred to the trust. An irrevocable trust can only be modified by the consent of all parties involved or by a court order.

The main advantage of an irrevocable trust is that it can provide significant tax benefits and asset protection to the grantor and the beneficiaries. An irrevocable trust can reduce or eliminate estate taxes, income taxes, gift taxes, and generation-skipping transfer taxes. An irrevocable trust can also shield assets from creditors, lawsuits, divorce, or Medicaid claims.