Learn how to use trusts to transfer wealth
Many types of trusts can help you accomplish your estate planning goals. Two common types of trusts are designed to help you transfer your wealth efficiently while avoiding probate and reducing estate taxes:
Life insurance trusts
An irrevocable life insurance trust lets you keep the death benefit of your life insurance policy outside of your estate (and out of probate), which means your life insurance proceeds will not increase your estate tax liability.
In fact, you can design your life insurance trust so that the proceeds are available to be applied toward your estate tax liability, leaving more of your actual wealth for your heirs.
Irrevocable gift trusts
You can give beneficiaries access to gifted funds according to the standards you set, until the beneficiary reaches an age that you select; these trusts can even continue for multiple generations.
Revocable living trusts
Although revocable living trusts are still part of your taxable estate, they do help you efficiently transfer wealth to your heirs and help them avoid the probate process.
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