A trust is an important estate planning tool that property owners should not ignore. A trust creates a legally binding relationship between a grantor and a trustee. If you are the grantor, a trust allows you to give the trustee a legal right to possess and manage your assets.
The first thing to do before you write a trust is to choose beneficiaries and a trustee. Beneficiaries are the people who will inherit your assets after you die. The other requirement is to determine the assets you want to include in the trust.
People add trusts to their estate plans for different reasons.
A Trust Offers Protection
Incapacitation and other unlikely events like sickness can limit your ability to manage your assets. A trust guarantees protection if you find yourself in such situations. The successor trustee will handle the assets on your behalf and give you peace of mind.
A trust can also protect your small kids. Trusts safeguard the assets until the children are old enough to inherit them. A trust can also protect the money you get from your assets for your kids' long-term use.
A Trust Saves Money
Trusts reduce the amount of estate taxes that married couples pay. A reduction in your estate taxes can relieve you of some financial burden.
Court probate is a costly process. Examples of probate costs include executor fees, lawyer's fees, and accountant's fees. A trust will help you avoid such expenses.
An irrevocable trust allows you to transfer your estate assets to the trustee. The transfer of your properties out of your estate comes with tax benefits.
A Trust Promotes Convenience
Proper asset management is a challenge to many older adults. Trusts relieve older adults from the burden that comes with their asset management.
Probate comes with many challenges, which can inconvenience your asset management. Examples are:
- Failure of the will executor to perform their role
- Will validity issues
- Disputes between beneficiaries
A trust will help you avoid all possible challenges of probate. Court probate avoidance ensures easier asset management.
Asset division can become a challenge, especially after divorce. A trust can help simplify the division of assets and properties in the event of divorce.
A Trust Promotes Privacy
Probate can make the public know who has the trust of your assets. The fact that a trust avoids probate makes it a confidential document. Therefore, a trust can protect your other confidential information like asset value and listing.
Asset privacy reduces the risks of unnecessary lawsuits. For instance, creditors may not sue you as quickly because they don't know the value of your assets.
Only the estate attorney and the successor trustee should have information about your asset trust. Therefore, choose a trustworthy and reliable lawyer and trustee.
A Trust Is Flexible
Trusts promote flexibility in asset distribution. As the grantor, you determine how you want your loved ones (beneficiaries) to get your assets. You can also decide who should benefit from your assets and who should not.
A revocable trust provides room for changes or cancellations. So, revocable trusts are more flexible than irrevocable trusts.
One way to improve the flexibility of a trust is to choose a good successor trustee. The right trustee will not sabotage your wishes.
A Trust Prevents Family Conflicts
Estate battles are common among many beneficiaries. Trusts ensure a fair asset distribution, which eliminates possible conflicts.
As a grantor, you should customize your estate trust. A customized trust is clear on who should inherit particular assets. Therefore, a customized trust will prevent confusion about your wishes as the estate owner.
The other way to prevent possible feuds is to be fair. The trust should treat your loved ones equally.
A good estate planning attorney can help you quickly create and document a trust. Donald B. Linsky & Associates PA is a reputable and experienced planning attorney that can help you draft a trust. Contact us today.
