Talk to an experienced estate planning attorney
One type of trust available in estate planning is a bypass trust. This type of trust is fairly complicated, but there are advantages to using one. There are also some disadvantages. That’s why it’s important to talk to an experienced estate planning lawyer. Hongo Law Office, LLLC can explain how this type of trust works and answer your questions.
Having lived and worked in Japan and the United States, attorney Yuka Hongo understands the language and cultural barriers that many people face when dealing with estate planning issues. Her experience, legal knowledge, bilingual skills and understanding of both cultures help clients overcome those barriers to create estate plans that meet their needs.
Protecting your assets for the future
A bypass trust, also known as an AB trust, is a legal arrangement that can help married couples avoid estate taxes after one spouse dies. After one spouse has passed, the trust splits into two separate trusts. One is the “A” trust – also known as the marital or survivor’s trust. The other is the “B” trust – also known as the bypass trust.
The surviving spouse has complete control over the “A” trust, which is a revocable trust. The spouse can spend the assets, add to them, give them away or leave them to beneficiaries. The surviving spouse does not have control over the “B” trust, which is an irrevocable trust. This trust is set up for other beneficiaries, such as the couple’s children, but the surviving spouse may be able to receive income from it.
These types of trusts can have several advantages for couples who have substantial assets. It can help them avoid estate taxes, which may be high. They help the surviving spouse avoid probate and all the fees and costs associated with that process. This also helps protect the assets in the trust from creditors.
There are several factors to consider. Bypass trusts are complicated and can be costly to set up. The surviving spouse does not have control over the B trust, but is responsible for maintaining it, or naming a trustee to oversee it. After the first spouse dies, income taxes will need to be filed for both trusts.
Start planning for the future today
Whether a bypass trust is right for you depends on many factors. One of them is the value of your estate. A bypass trust can be changed, but only while both spouses are still living.
Trusts are a very important part of a comprehensive estate plan. Attorney Hongo can meet with you to review your financial situation, discuss your goals and review your options. She can then help you create an estate plan that protects your assets and prepares your family for the future. Many clients find that planning ahead gives them peace of mind.
Learn more about how we can help you create an estate plan that meets your needs. Attorney Hongo can meet with you at her Honolulu office. She also meets with clients in Japan, which she usually visits twice a year. Contact us to schedule a consultation at a time that is convenient for you.