WHEN DO YOU NEED REMAINDER BENEFICIARIES?
What is a LIFE ESTATE?
Most creators of a trust want to enjoy the assets for the remainder of their life and the life of their spouse. By creating a LIFE ESTATE, you retain use for your lifetime.
What is a REMAINDER BENEFICIARY?
A REMAINDER BENEFICIARY receives benefits after the LIFE ESTATE holder(s) are gone. You can even designate various limits or benefits regarding further life estates, investments, income, disbursals, funding of education, or separate assets.
Enhanced Trust Provisions and Options
There can be tax benefits or reductions by provisions and language within the trust. It is often possible to reduce or shift taxes to a lower tax bracketed person. Get professional advice from your accountant or tax preparer.
One example is to dictate that the residence cannot be disposed of (nor can you be moved to a convalescent home) during your lifetime. This removes the incentive for relatives or beneficiaries to sell your home to enjoy proceeds before you are gone.
Another example is to designate to remainders of the remainders, or retain (or remove) certain classes of beneficiaries. For instance you could designate medical students as a specific class of beneficiary, just like naming a charity.
Another example is to restrict the future use of a property, such as stating that specific real estate property could only be used as a baseball park. Attempts to use the park for other activities (like football) could cause the property to revert back to the trust.