Planning for the future can be complicated. There are so many things to consider. What do you need to do to make sure your assets are passed on to your loved ones? Should you choose a will or a trust? Although it may feel overwhelming, it is important to plan now to ensure your family’s security. The best place to start is to learn about all of your options. An experienced estate planning attorney can provide guidance to help you make the best choice for your future.
One of the ways you can manage how your assets are distributed after you are gone is through a trust. Many people think that trusts are only for those with a lot of assets, but that is not the case. Anyone can benefit from setting up a trust.
Understanding How a Trust Works
A trust is a legal entity that can hold property and assets on your behalf, or on behalf of your beneficiaries. If you are the person creating the trust, you are considered the “grantor” of that trust. You can then appoint a “trustee” to manage the trust and its assets. While you are alive, you can appoint yourself to serve as the trustee. That allows you to maintain full control over your assets and property. You can also name another person to serve as the trustee after you are gone. That person will be able to manage and distribute your property and assets according to the instructions you provided when you set up the trust.
If you create a revocable trust, you are allowed to change the terms of the trust at any time. If you create an irrevocable trust, you are not allowed to make any changes to the trust. The main benefit of an irrevocable trust is that it allows you to avoid estate taxes since your property and assets are held in the trust and not considered part of your personal estate. You will want to consult with an expert estate planning attorney to help you decide which type of trust is best for you.
A Trust Can Help to Avoid Probate
The main benefit of setting up a trust is that your loved ones will not have to go through the probate process after you have passed away. Probate is a legal process in which your loved ones have to go to a probate court or an administrator to prove the validity of your will and administer your estate. It can be costly and time-consuming to go through the probate process. In some cases, family members may have conflicting opinions about your wishes, which can cause rifts within the family that last for years. Trusts are great because your loved ones can avoid probate and the public exposure that comes along with it.
Other Benefits of Choosing a Trust
There are many other benefits that come from setting up a trust, including:
- Potential tax savings for you and your beneficiaries.
- The ability to leave property and assets to your minor children, which will be managed by the trustee until the children reach adulthood.
- The ability to protect your assets by placing certain restrictions on their use or distribution.
- The ability to ensure your legacy is passed on to your loved ones on your own terms.
Some of the benefits may depend on whether you choose a revocable trust or an irrevocable trust. An estate planning attorney can help explain the benefits so you can make the best decision.
As you plan for your future, there are many resources available to help. An experienced estate planning attorney can offer guidance and support so you can proceed with confidence.
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