There are many different types of estate planning available to families in Detroit, ranging from simple wills to trust funds and more. You are likely to want to set up your estate planning to benefit your loved ones after you pass on. Did you know that it is also possible for a trust to generate income? Here, we will discuss how you might set up such a trust, as well as the reasons you might want an income-generating estate plan.
According to Ameriprise Financial, trusts differ from wills in that they are customizable, and there are different ones to choose from. You might create a special needs trust to take care of the medical and living expenses of a disabled family member after your death. A living trust can be set up to manage your assets while you are alive, and you can choose to change its terms while you are capable. You could designate an irrevocable trust to preserve more of your wealth for your relatives and protect it from creditors. The securities you place in some trusts, such as stocks or bonds, may provide you with enough income to live on in your twilight years. This income might also be transferred to beneficiaries after your death, allowing a trust fund to generate money for your loved ones for years to come.
Depending on the type of trust you set up, an income-producing trust might be taxed at a higher rate than a different trust. Since legal counsel is often necessary to choose the right type of estate planning for your individual needs, this information should not replace the advice of a lawyer.