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Charleston Estate Planning & Asset Protection Blog

Wednesday, May 15, 2019

4 Trusts You May Not Know About

Many people are familiar with basic trust agreements such as the Revocable Living Trust or the Testamentary Trust. However, there are a few types of trust agreements that you may not be aware of that could be very useful as part of your estate plan. Working with a South Carolina wills and trusts lawyer is the first step in determining if a trust would benefit you and, if so, what type of trust offers the most benefits based on your goals and financial situation.

Four Trust Agreements That You May Want to Consider Adding to Your Estate Plan

Special Needs Trust

A Special Needs Trust provides financial support for an individual who is unable to care for himself or herself or manage his or her own financial affairs. There are several options for funding a Special Needs Trust that allows the grantor the ability to protect the beneficiary’s eligibility for government benefits and social services.

Life Insurance Trusts

Life Insurance Trusts serve several purposes. You can set up the trust so that the beneficiaries do not receive the entire balance of the insurance proceeds upon your death. This element could be very useful if you have heirs that are in financial trouble or would squander the inheritance. A Life Insurance Trust can also help with estate tax planning. By allowing the trust to own the life insurance policy, the death benefits are not subject to estate tax. You can also reduce the taxable value of your estate by transferring money to the trust now to allow the trust to pay the insurance premiums each month until your death.

Qualified Terminal Interest Property Trust (QTIP Trust)

A QTIP Trust preserves your property for the benefit of your children if you die before your spouse. If your spouse inherits your property upon your death and remarries, there is a chance that your property could be inherited by your spouse’s new husband or wife if your spouse fails to have an estate plan that ensures your children receive the property upon your spouse’s death.

With a QTIP Trust, you can provide for your spouse during his or her lifetime, but ensure that the property remains in the trust for the benefit of your children after your spouse’s death. Because the trust owns the property, your spouse’s new wife or husband cannot inherit the property when your spouse passes away.

Spendthrift Trusts

If you do not want your heirs to receive their entire inheritance upon your death, you can use a Spendthrift Trust to hold the inheritance for their benefit. The terms of the trust may allow for periodic distributions based on the age of the beneficiary or set up to distribute set amounts to the beneficiary as an allowance. The trust may also be set up to pay for a beneficiary’s education, medical expenses, housing, or other specific expenses.

Contact a South Carolina Estate Planning Attorney

The above trusts are just a few of the trust agreements that you may want to consider when developing your estate plan. There are also trust agreements that provide for your pets, protect assets, and benefit charities. The laws related to trusts are located in the South Carolina Trust Code. A South Carolina wills and trusts lawyer can recommend one or more trust agreements based on your needs and draft agreements that comply with state laws. Schedule a consult today.

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Wiles Law Firm, LLC helps clients with their estate planning needs in Charleston, South Carolina and the surrounding areas such as West Ashley, Summerville, North Charleston, Mount Pleasant, and John's Island.

Information on this website is not legal advice. Further, viewing of the enclosed information does not create an attorney-client relationship with Wiles Law Firm, LLC. Matters will be handled by attorneys who primarily practice out of our office in Charleston County located at 852 Lowcountry Blvd., Ste. 101, Mt. Pleasant, SC 29464. M. Emerson Wiles, III is the attorney responsible for this advertisement.

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