You may have seen books or advertisements on television or the internet promoting a streamlined, one-size-fits-all approach to estate planning. Just as every individual is unique and every family has its own set of special concerns, estate planning tools actually come in many varieties, not just a generic “one size.” While a simple last will and testament is the go-to for many people looking to provide for those who will be left behind in the future, there are many additional options, even for those who do not consider themselves to be wealthy. For instance, there are many different types of trusts, such as fiduciary arrangements between a trustor, a trustee, and a beneficiary, that can accomplish goals such as providing for beneficiaries who are unable to manage their own financial matters. A discretionary trust can work for some families in this situation. Nashville estate planning attorney Randy Ratliff offers legal advice on a wide range of will and trust options, including discretionary trusts, and we welcome the opportunity to serve your family.
When a trust is set up, there are three parties involved: the trustor (the person who sets up the trust – this is also the person who initially owns the assets that are used to fund the trust), the trustee (the person responsible for managing the assets of the trust), and the beneficiary (the individual who will benefit financially from the trust arrangement). There are many reasons to set up a trust, as well as a wide array of types of trusts. The particular reason that a given trustor has for establishing a trust will drive the type of trust that is entered into. An experienced estate planning lawyer can help you determine the best one to meet your needs.How Discretionary Trusts Work and Why One Might Fit Your Needs
Some trusts are “testamentary,” while others are “living.” A testamentary trust does not go into effect until the trustor has passed away. As the name suggests, a living trust goes into effect while the trustor is still living. Trusts can be “revocable” or “irrevocable.” Generally, these terms pertain to the degree of flexibility the trustor has in changing the terms of the trust once the agreement has been entered into. Revocable trusts are more easily revoked or changed than irrevocable trusts, although there may be some rare circumstances in which a trustee can seek relief from the terms of an otherwise irrevocable trust.
Another term that can apply to some trusts is “discretionary.” While most trusts are set up in a way such that the beneficiaries have certain, guaranteed legal rights to the funds contained in the trust, in a discretionary trust the trustee is given full discretion as to any funds that are given to the beneficiary or beneficiaries. Even if the trustee decides to completely withhold the trust funds from the beneficiary, the beneficiary cannot make any claim or demand against the trustee, although in some circumstances, the trustee may be removed and replaced by appointers designated in the trust document. Discretionary trusts are usually used to help protect those who cannot manage their assets responsibly on their own, such as those who are very young or immature, have a mental disability or impairment, are known gamblers or spendthrifts, or who are in heavy debt or in bankruptcy. Using a discretionary trust in such a situation can also help protect the beneficiary from having the trust funds attached by creditors.Speak to a Nashville Attorney About Your Estate Planning Needs
Estate planning tends to be one of those tasks that many people put off as long as possible. However, planning for one’s estate and other long-term care needs does not have to be difficult or expensive. In fact, planning sooner rather than later can result in tax savings, increased chances of eligibility for government programs, and other financial benefits in many situations. At the Randy Ratliff Law Offices, PLLC, we assist individuals throughout Davidson and Williamson Counties, insuring that their requests are made known to their loved ones using appropriate estate planning tools. Attorney Randy Ratliff has represented clients in communities including Nashville, Hermitage, Antioch, Madison, Joelton, Franklin, Goodlettsville, Brentwood, or Cool Springs, call us at 615-656-8282 or contact us online to schedule an appointment to learn more.