Estate planning can be a daunting process for anyone in Alberta without the guidance of legal counsel. One of the estate planning tools that can help accomplish certain goals is a living trust. This option allows a person to pass property ownership to beneficiaries immediately. Once established, a living trust can be modified throughout the testator’s life, and because the trust owns the assets, it does not form part of the trustor’s estate and is therefore not subject to probate.
Those with children from previous marriages typically find living trusts the ideal way to provide support for an earlier spouse, if desried, and ensure that children receive the inheritances intended for them. In cases in which the surviving spouse’s financial expertise is not sufficient to manage the assets in a trust, a trustee can be appointed to oversee the trust on behalf of the surviving spouse. If a child or spouse is disabled, a living trust can provide appropriate care for that person after the testator’s death.
When it comes to taxes, earned income in a trust pays income tax in the highest bracket. However, if the proceeds go to adult beneficiaries, they will be taxed according to their tax brackets as per their income levels. Some choose to use living trusts to provide incomes for children or grandchildren by adding funds to the trusts while the children are young, and allowing the funds to grow and be paid out when the children reach predetermined ages.
These are but some of the goals that can be accomplished with living trusts. Most people have many questions when it comes to estate planning, and only after having those questions answered can anyone make informed decisions about trusts and other estate planning tools. An Alberta lawyer with experience in this field of the law can provide the necessary support and guidance in the planning and updating of trusts and other documents.