As people consider plans for their estates, there are many options to consider. There are many factors that people ponder when deciding between different plans, which are determined by the unique needs and desires of the benefactor. The ever-changing laws that govern trusts may require those in Georgia to evaluate other options that could profit their beneficiaries in the best possible way upon their deaths.
For many years, trusts were a preferred method of minimizing estate tax consequences. However, exemption levels and tax rates have changed approximately 20 times over the past few decades. Currently, many people have become more concerned with capital gains and income taxes due to legislative changes. In this area, trusts are decidedly less efficient than they used to be.
Income from trusts may now be taxed at 39.6 percent, while capital gains tax can be higher than 30 percent for some individuals. It was recently noted that the complications and costs associated with setting up a trust may likely outweigh benefits for a married couple whose net worth is less than $11 million. On the other hand, setting up a trust still has benefits such as allowing people to transfer their assets in a controlled manner both during their life or after they pass away.
It could greatly benefit those in Georgia who are making estate plans to discuss their unique financial situations with an attorney who is experienced in establishing trusts and other forms of estate planning. An attorney in this area of law can be an invaluable resource to help clients determine their financial objectives, discuss the potential financial consequences of various alternatives and understand the impact for their beneficiaries. An attorney can also assist in establishing a trustee that can assist in administration if a person is incapacitated or passes away.
Source: cnbc.com, “What’s the difference between an inheritance and a trust?“, Andrew Osterland, July 6, 2016