Getting estate planning documents in place without professional assistance could be a daunting task. While grantor trusts can be valuable tools for some, they may not suit all New York investors. This is a process typically best executed with the guidance and support of legal counsel.
Grantor trusts come in several types, and the most appropriate choice would depend on the individual’s financial goals and needs. A grantor trust is effective during the creator’s lifetime. The person who establishes the trust is also called the grantor, and that person will retain control of the assets and income of the trust. These trusts provide protection against creditors and allow the trust maker to manage the assets according to his or her wishes.
A grantor trust is typically established to minimize taxes and preserve wealth for heirs. The grantor, and not the trust, is taxed on the assets. This is beneficial to the grantor because the personal tax rate is not as high as the rate that would apply if the trust were taxed. Individuals who want to establish long-term financial plans may have questions about the different pros and cons of each type of trust.
A New York estate planning attorney can explain the different types of trusts and provide the necessary support and guidance after assessing the client’s unique circumstances. The lawyer can also explain the need for drafting other estate planning documents. These include a will that contains specifics about the distribution of the assets, financial power of attorney and advance health care directives.