When planning your estate, you’re likely overwhelmed by the number of options available for you to establish. While you may want to create a will, which is often regarded as the most basic and essential estate planning tool, it’s worth considering whether or not you should establish a trust fund. However, you may wonder if there is a limit to how much money you can place in the trust. As such, it’s essential to understand how these tools work to determine if it’s right for your needs. Read on to discover more about this process and why you need PA trust attorneys to help you make the most informed decision for your needs.
How does a trust fund work?
When you establish a trust fund, you are essentially placing assets and funds on hold. Generally, this works to ensure you can better control the distribution of assets throughout your life and after your death. Additionally, creating a truth fund can help support and protect your loved ones following your passing, as these tools can help reduce estate taxes your beneficiaries could incur after your passing and help them avoid the lengthy and costly probate process.
It’s important to understand that a trust fund can take many forms, which impact how they are structured and its purpose. As such, exploring all your options to ensure you are creating the correct document for your unique circumstances is critical.
Is there a limit to how much money one can put in the trust?
Generally, there is no limit to how much money can be placed in a trust fund. However, it is critical to understand that placing funds in a trust can incur taxes if you exceed the exemption amount.
Your lifetime tax exemption is limited to 12.92 million. However, once you reach this limit, you can use up to $17,000 annually in a gift exemption. Though there is no explicit limit, you may want to consider how much you contribute to the fund to avoid taxing these funds.
What should I do if I need assistance establishing the trust?
If you are interested in establishing a trust but aren’t sure where to start or which option is best for your needs, you’ll want to connect with an experienced attorney as soon as possible to discuss your circumstances. A lawyer can help you explore your options to help you make an informed decision about which trust you should create. Additionally, they can provide additional guidance for any issues you encounter after the trust is established.
When you are ready to create a trust fund to help support your loved ones, the team at Friedman Schuman is prepared to assist you. We understand how confusing this process can be, which is why we’re dedicated to doing everything possible to make this simple for you. Contact us today to learn how we can assist you.