Understanding Trusts in Louisiana
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A trust is a legal arrangement that facilitates the transfer of wealth from generation to generation, while avoiding many of the liabilities that accompany wills/testaments. If you have money or property that you want to leave to your family after you die, you may benefit from establishing a trust in your name, with your loved ones as the beneficiaries. The trust will make payments to the beneficiaries according to whatever directions you set forth in the document that governs the fund.
In a trust, you are known as the settlor, a term used to describe the party who places funds or other assets in the trust. The fund is cared for by a trustee, who is commonly either another family member or a professional who specializes in trust administration. It is often wise to choose a Baton Rouge estate planning attorney or financial professional for the position, as one needs specialized knowledge on trusts to protect the assets from taxation or legal liabilities, as well as to oversee the growth of the fund.
Types of Trusts in Baton Rouge, LA
In Baton Rouge, Louisiana, as in the rest of the United States, there are several types of trusts that can be used for various purposes.
The most common ones include:
Revocable Living Trust: This type of trust allows you to maintain control over your assets during your lifetime and determine how they are distributed after your death. It can be changed or revoked at any time.
Irrevocable Trust: Unlike a revocable trust, an irrevocable trust cannot be altered or revoked without the consent of the beneficiaries. These types of trusts are often used for tax planning purposes.
Charitable Remainder Trust: This type of trust allows you to donate assets to a charitable organization while receiving income from those assets during your lifetime.
Special Needs Trust: A special needs trust is designed to benefit an individual who has a disability. The trust can supplement the individual's government benefits without disqualifying them from receiving those benefits.
Testamentary Trust: This type of trust is created through a will and becomes effective upon the death of the person who created the will.
Life Insurance Trust: A life insurance trust is a type of irrevocable trust that is specifically designed to hold life insurance policies. This can help avoid estate taxes on the proceeds of the policy.
Asset Protection Trust: This type of trust is designed to protect assets from creditors. It's often used by individuals with a high net worth.
Each type of trust serves a specific purpose and has its own advantages and disadvantages. It's important to consult with a Baton Rouge estate planning attorney to ensure that you choose the right type of trust for your specific needs.
The Benefits of Creating a Trust
There are several major advantages to trusts, including the fact that it will not be subjected to a succession or probate before the distribution of assets, the details of your gifts will not go on the public record, and you can dictate a schedule of payments to your beneficiaries, reducing the risk of having the estate squandered after a lump-sum inheritance.
Contact Our Trusts Attorneys
Our Baton Rouge trust lawyers have years of experience in estate planning and can help guide you with issues like trust taxes, avoiding penalties, and safeguarding fund assets. When you want to create a Louisiana trust, contact our Baton Rouge attorneys to help you navigate the process.
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