Some estate owners in Ohio might wonder what type of trust would be best for their particular situations. For example, a special needs trust can be created to provide for a loved one who gets government benefits because of a disability or medical condition.
An incentive trust can set certain requirements on distribution. For example, the person may be required to complete an education or reach a certain income level before receiving distributions. Charitable trusts can contribute to charity, but they can also be designed in a way to provide income to a person or beneficiaries as well.
In the past, wealthy couples often created estate plans in which the assets of the spouse who dies first are placed in an irrevocable trust to avoid or reduce estate tax. However, since the estate tax exemption has been raised to over $11 million for individuals, this will no longer be necessary for most couples. There may be other uses for trusts as well, such as placing assets under separate ownership.
One advantage of this approach is that assets may be protected from creditors. However, trusts and estate plans should be reviewed regularly to ensure that they remain current. For example, the higher estate tax exemption is supposed to sunset in 2026. In addition to changes in tax law, changes in assets or family members may also lead to the need for a revision. When family members die or when they or the creator of the estate plan marry, divorce or have children, the plan may need to be changed. This can be particularly important in blended families where there are children from a previous relationship. An attorney can help a client make sure that their estate planning documents are updated and thorough.