More people are discovering the benefits of using trusts as estate planning tools. What’s interesting about an annuity trust is that you can choose another person to be your beneficiary, or you can become your own beneficiary. Some annuity trusts even allow you to pool resources with other investors or donate to your favorite charity.
Despite its benefits, many people are hesitant to create an annuity trust since it can be expensive. Regardless, if you feel you can handle the responsibilities of owning a trust, here are three reasons to think about creating one.
You could supplement your retirement income, and more
The average Social Security retirement check is approximately $1,542.00 a month, which is barely enough to live on for many seniors. An annuity trust can be a great way to supplement your income without unnecessarily increasing your tax liabilities.
Money held under an annuity trust is exempt from taxes until you begin receiving payments. It’s advantageous for you since the annuity amount increases yearly without you needing to fret about tax fees for the time being.
If you’re a parent or grandparent, you could create a trust to fund future college tuitions, or so that said children wouldn’t have to work for a living once they’re adults. You could also make a trust for other beloved relatives if you have no children of your own but want to help out other family members.
Owning an annuity trust comes with many obligations, but it could ultimately pay off. You can receive more information about annuity trusts and other trusts that can accomplish your estate goals by seeking experienced legal assistance.