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Facts - Books - News U.S. Facts Of Law: |
Trusts And Estates
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The law of trusts and estates is generally considered the body of law which governs the management of personal affairs and the disposition of property of an individual in anticipation and the event of such person's incapacity or death, also known as the law of successions in civil law. Its techniques are also used to
fulfill the wishes of philanthropic bequests or gifts through the creation, maintenance and
supervision of charitable trusts. In some jurisdictions, such as the United States, it overlaps with the area that has been come to be known as elder law that deals not only with estate planning but other issues that face the elderly, such as home care, long term care insurance or social security or disability benefits.
Used in
estate planning.
(see
Legal Kits)
What is an estate?
At common law, an estate was comprised of the tangible assets of real and personal property which belong to a natural person. More recently, the concept of an estate has been expanded to encompass any thing of value to which the deceased person was or might have been entitled to claim during his or her lifetime. The property of the estate must either be
bequeathed through a will or transferred through the laws of intestacy if there is no will. A will is the most commonly used legal instrument for the distribution of the tangible assets of a deceased person. Before property can be disposed of pursuant to the terms of a will, the will must be submitted to a probate court having jurisdiction of the estate of the deceased. Probate is often considered a relatively lengthy and expensive process, albeit one which may provide greater safeguards with regard to the rights of a deceased person's beneficiaries, though probate often is contested by creditors or disgruntled members of the family of the deceased who feel they have not received their fair share of the deceased's property
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Uses of trusts
In order to expedite the process of transferring assets to intended
beneficiaries, some people choose to arrange their property so that it can bypass the probate process upon their deaths. For example, placing property into a trust before death (as opposed to a testamentary trust) will often allow the accomplishment of the objectives of property distribution without coming under the jurisdiction of a court and the possible redistribution after a lengthy contested probate process and trial. Similarly, jointly held property (in common law systems), life insurance, annuities, US Tax Code section 401(k) Retirement Plans or Individual Retirement Accounts (also known as RRSPs in Canada) will also avoid probate as these devices allow property to transfer to beneficiaries outside the probate process.
Use of estates and trusts
Another major factor in trusts and estates law may be to minimize one's tax exposure. After an applicable exempt amount, the United States federal estate tax very quickly approaches 50% of one's taxable estate. The proper use of trusts may reduce one's tax burden. The applicable exempt amount is currently one million dollars in 2003, and is scheduled to increase each year until the estate tax is temporarily repealed for one year in 2010. The year after, the estate tax is scheduled to be reinstated, with the previous exemption of one million dollars.
Trusts may also allow people a certain limited amount of control of how the amount held by the trust is handled. For example, one could leave money for somebody who may not be mature enough to handle money, and state that the money can only be used for health, education, support and maintenance of that person until the age of 35, upon which time the remaining income and principal will be distributed. One can also distribute one's assets to charitable purposes by creating an irrevocable charitable trust that may distribute the principal or the income of the trust much in the same manner as a private foundation.
Special Needs Trusts
Special Needs Trusts are created to ensure that beneficiaries who are developmentally disabled or mentally ill can receive inheritances without losing access to essential government benefits.
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Trusts And Estates News
• TaxWatch: New Rule Makes Filing Easier For Those In Partnerships, Estates Mar...
Investors and beneficiaries should be jubilant about the Internal Revenue Services recent announcement that its cutting to five months from six the extension of time to file certain business and trust tax returns
• Building Bridges To Connect Golden Gate Estates Puts Residents On Opposite Si...
Whether a dead end is a good thing or a bad thing can be a matter of interpretation. For some residents of Golden Gate Estates, the quiet associated with a dead end street was the reason for purchasing their homes.
• N.C. Bans Two Businesses After Scams The Wilmington StarNews
Two companies that cheated seniors have been barred from doing business in North Carolina, Attorney General Roy Cooper announced Thursday.
• Biz Buzz: Altier Joins Bank As Client Adviser The Sarasota HeraldTribune
Orlando based Seaside National Bank Trust, which has offices across the state including in Sarasota, recently announced that Steve Altier has joined the bank as client adviser. He will report to Sarasota Regional President Gene Carson.
• IRS Reduces Filing Extension For Some Business Owners BizJournals
Some business owners will have one less month to file their federal tax returns under a new rule implemented by the Internal Revenue Service.
IMPORTANT NOTICE:
The information provided by FactsOfLaw.com does not
constitute legal advice or any other type of advice and is
provided for educational purposes only without
warranty of any kind. FactsOfLaw.com has not
reviewed the information on this page for accuracy
and is not responsible for any errors, omissions or
inaccuracies. For legal advice you should
consult a licensed attorney. Source: wikipedia.org
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