Most people don’t think about estate planning as a way to manage their money or keep their relationships free of conflict, but the reality is that when most couples fight, it’s over money. If there is fighting over money, it’s typically on how to spend that money, either because they are on a fixed income or they don’t have enough money to do everything they both want to do. Beyond financial planning and marriage counseling, another option is your estate planning attorney.
There are many different tools an estate planning attorney has at its disposal to structure your assets to grow, while allowing you use of the money, providing you spending limits and added benefits like tax savings and creditor protection.
CHARITABLE REMAINDER TRUST
A charitable remainder trust is one such tool that an estate planning attorney can use to limit spending while allowing you the use of the funds. This type of trust benefits most of those who are about to receive a lot of income through inheritance, a lawsuit, or business acquisition. The trust can receive these funds and defer income tax on the bulk of the money, you are only being taxed on the money you take from the trust every year. These types of trusts can be designed so that you take a fixed amount every year or a percentage of the money every year, thereby limiting your access and forcing you to budget your money and maintain the funds over time. A portion of the funds is reserved for a charitable organization of the client’s choice, distributed at the death of the client. If you have charitable inclinations, this is a highly beneficial way to structure your trust.
DOMESTIC ASSET PROTECTION TRUST
A domestic asset protection trust is another tool used by many estate planning attorneys that allow a couple to set up a trust to receive their money and then appoint a third party to make distributions for certain items only, like health and maintenance. This type of trust is ideal for someone who has ties to a family business or is otherwise concerned about a potential divorce and division of assets. The benefit is that it provides creditor protection to the money, including protection from an aggrieved ex-spouse.
MARITAL DEDUCTION TRUST
A marital deduction trust is yet another tool that an estate planning attorney can use to plan for the assets of a couple. This type of trust is ideal for a couple who is concerned that one spouse may quickly dispose of assets upon the death of the first spouse or a couple in a second marriage who has children from a previous marriage. This type of trust is designed to pass on certain assets to a surviving spouse through an irrevocable trust. This type of trust also calls for a third party to control and make distributions according to the directions of the trust so that the surviving spouse has access to funds through distributions for health and maintenance, but otherwise provides creditor protection.
These are just a few of the tools an estate planning attorney can use to plan for the assets of a couple and provide the necessary counseling to devise a plan that works for all and keeps conflict out of the marriage. It is strongly recommended that you seek experienced counsel in drafting these trusts, some of which may not even be recognized in your State. Experienced counsel can advise you of your options and draft the appropriate trust for your situation.
At Katie Charleston Law, PC, we are experienced in these types of trusts and take every step to make sure your plan is unique to you and will work during your life and beyond. You can reach us at 317-663-9190 for a consultation on your plan.