The way estates and trusts are set up will impact the distribution of assets after the death of an individual. Certain taxes will be applied differently, depending on the existing plan. If there is no plan in place for the distribution of assets, this process will be handled through the state, which is why planning is important. Thorough planning is the only way to prevent the creation of a more complicated process. Knowing the applicable taxes is necessary in choosing the proper plan for the distribution of your assets.
An individual’s estate consists of all of their possessions. Vehicles, property, bank accounts, and other possessions are all included in a person’s estate. Estate planning can provide the most effective distribution of your assets, because it will enable you to choose the option that will be easiest for your loved ones.
A documented will establishes who will inherit an estate after a person’s death. However, if there is no will, the estate’s distribution will be determined by the state.
Trusts are legal agreements. In a trust, the individual states that one or more people, called the trustees, will be in charge of the assets for other people, called the beneficiaries. They are usually contingent on certain terms. A revocable living trust is the most common type of trust, because the assets do not go through probate before distribution in a revocable living trust. This is typically why these types of trusts are established.
Taxes will impact different plans for asset distribution differently. This is why you should consult with a professional in order to determine the best option for your asset distribution.
Here at Ulrich & Associates, we are knowledgeable about estate and trust taxation, which means that we can help you determine the appropriate plan for the distribution of your assets. In order to learn more about Estate and Trust taxes, contact us at Ulrich & Associates today.