By: Barry E. Haimo, Esq.
November 1, 2018
Burt Reynolds Left His Son Out of His Will. Here’s What He Did Instead…
Reynolds recently passed away at the age of 82. His son Quinton, 30, was adopted by Reynolds and his ex-wife Loni Anderson.
You may have heard the seemingly shocking headline that Burt Reynolds left his son out of his will – but he did not leave him without financial assistance. In fact, he set up a trust that will provide for his son’s needs instead.
Reynolds signed his will in 2011, which lists his niece as a personal representative. All of his assets seem to be secured in his trust, and his estate is estimated to be worth $5 million.
In other words, far from being “left out,” Quinton should be just fine. In fact, he’s probably far better off then if his father had simply left him things in his will.
The Value of a Trust Fund
Most people know that a trust may offer tax advantages. They can provide for many other situations that are commonly overlooked, such as special needs, substance abuse, financial irresponsibility, keeping assets in the family, probate avoidance, guardianship avoidance, and asset protection of your beneficiaries’ interests.
Here are other advantages of setting up a revocable trust:
- You set the parameters for asset distribution upon your death.
- You can name the trustee who manages the trust funds if you die or become incapacitated.
- You decide who is in, who is out, and not the state in which you reside.
- You avoid courts, which are expensive and time consuming.
- Your affairs are more private than the public record of probate.
- The transaction is easier for your family.
- You also are planning for lifetime contingencies not just death.
Depending on your needs, a trust can be a better solution for you than a simple will.
Different Types of Trusts
Your estate planning attorney can help you decide which type of trust is best for you. These are the various types of trusts that each have pros and cons to consider.
Credit shelter trust
This type of trust allows you to transfer an amount below or equal to your estate tax exemption. The rest of the estate goes to your spouse and is not subject to taxation. You can also set limits on how your funds are distributed once you die.
Generation skipping trust
You can use this trust to give tax-free money to your grandchildren or great-grandchildren. Your children can receive trust income for anything that benefits your grandchildren, including tuition or housing. Check with your estate planning attorney to know if this option is best for you.
Qualified personal residence trust
If your home will grow in value, this type of trust may be best for you. You will give your home as a gift after a certain period of time and retain control of the home during that period. For example, if you want to stay in your home for 15 more years, your children can receive your home as a gift after that period passes.
Irrevocable life insurance trust
This type of trust takes your life insurance out of your estate. After you surrender ownership rights to your policy, the proceeds can be used to pay estate costs and provide tax-free income to your beneficiaries. Small business owners can benefit from this type of trust, because it provides an income for heirs until the business sells.
Qualified terminable interest property trust
If your family has been affected by relationship changes due to divorce or remarriage, this type of trust allows you to secure assets for certain relatives. The trust gives your spouse income and your specified beneficiaries will receive the remainder upon your death.
Setting Up a Trust
A basic trust isn’t expensive to set up, though costs go higher for a complex estate. Typically, the plan will include a trust, will, and health care proxy forms. Contact a qualified estate planning attorney today to set up a trust. You and your family will benefit in the short term and the long term from the type of trust that’s right for your situation.
Barry E. Haimo, Esq.
Strategic Planning With Purpose®
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