What Steps Should You Take to Establish a Trust in South Carolina?

What is a Trust?

One of the most appealing characteristics of setting up a trust is that it can help you pass on assets to loved ones while minimizing tax implications. There are different trusts to choose from, each serving a purpose and may or may not be the best fit for your specific scenario.

Another appealing characteristic of trusts is that generally speaking, the assets held within can avoid the probate process. The probate process occurs upon death and can be costly and time-consuming for those you leave behind, so utilizing tools to prevent it is impactful.

By working with your experienced estate planning attorney, you can ensure that a thorough review of your wishes and needs can be completed and a reasonable strategy formed that allows those goals to come to fruition, leaving your legacy protected and supporting those you love the most for years to come.

Revocable and Irrevocable Trusts

A revocable trust allows those who create them to remain flexible as life changes. Sometimes called a living trust, a revocable trust can be changed or modified at nearly any time.

The drawback to the revocable trust is that since the creator still has complete control over the assets in order to make changes as necessary, the assets are still considered part of your estate and, therefore, are subject to taxes.

On the contrary, an irrevocable trust doesn’t allow for changes or modifications to be made, barring only a few exceptions. Some find this option less appealing as life unfolds and may feel “stuck” with the parameters set up in the irrevocable trust. For example, divorces happen, whether it be your own or beneficiaries you may have appointed. Or someone you once trusted fully may have betrayed you, and you may wish to remove them from your estate plans. Irrevocable trusts don’t allow this to happen in most cases, or at least quickly.

However, the assets being tied up or “stuck” within the trust alleviates most or all tax ramifications regarding the estate. Speak with your estate planning attorney to determine which of these two popular options is best for your family or perhaps some assets in each type of trust.

Special Needs Trust

Another option for a trust is a special needs trust. A special needs trust can be used to ensure that a loved one with physical or mental disabilities is well-cared for. A special needs trust can also provide adequate protection for those who qualify for government benefits to ensure that they aren’t inadvertently disqualified due to their income or assets at some point in their life.

Depending on what best suits your needs, special needs trusts can be set up as irrevocable or revocable.

Asset Protection Trust

Another option for a trust is an asset protection trust. Those who choose to create one find it appealing as it ensures an added level of protection to their assets. Those in careers that are highly susceptible to lawsuits find asset protection trusts especially appealing.

For example, if you are a doctor or a lawyer, it’s essential to protect your personal assets should someone pursue legal action against you. An asset protection trust allows you to do just that.

How Do I Create a Trust?

When you work with your estate planning attorney to set up your trust, they will begin by walking through your financial picture with you and learning more about your needs and wishes.

Each family will have different requirements now and in the future. An experienced attorney can help you address immediate needs and forecast what you may want to happen in the future for generations to come.

Once you have decided which tools to utilize, your attorney will work with you to determine which assets to fund the trust and help you transfer them.

A significant benefit to working with an estate planning attorney is that you can ensure that the trust is valid and all-encompassing, rather than leaving important information out or not accounting for significant assets.

They can also provide professional legal guidance, such as choosing which tools to utilize, who is a good candidate for your trustee, and more. Setting up a trust probably isn’t something we do every day or every week, but for estate planning attorneys, it typically is, allowing for far more experience and efficiency than we may find by trying to do it ourselves.

Next Steps

Once you have the trust set up, you should ensure it is managed correctly and following your stipulations. Another vital aspect to remember is that a consistent review of the trust should occur regularly to account for significant changes in your life.

Assets can shift, people can come in and out of your life, and more, and you should ensure that your trust or other estate planning tools account for these changes.

An Estate Planning Attorney You Can Trust

With nearly 30 years of experience, our team has vast knowledge across various practice levels. We have successfully helped countless clients, both big and small. Awards and experience aside, we genuinely listen to our clients and get to know them on a personal level so we can best help them and provide the most effective guidance.

Setting up a trust is an excellent step in providing for your loved ones for years to come while also providing benefits to you for the rest of your life. We look forward to discussing your comprehensive estate plan and ensuring you have the right tools for your specific family.

Contact our office today at 864-689-4482 to schedule your strategy session and learn more about why our clients rely on us for their estate planning needs.