One of the most powerful tools used in a comprehensive estate plan can be to create a trust. Trusts can help you avoid probate, minimize your estate taxes, give you more control over the distribution of funds, protect your property from lawsuits and creditors, allow for charitable giving purposes as well as provide privacy for your family.
In this post, we’ll explore the many benefits that trusts have to offer.
1. A Trust Can Help You Avoid Probate:
Probate is the process required to settle an estate. Even in the case of having a will, a court is still involved in the probate settlement process. Because of this, probating an estate can take up much more time and money than creating a trust because there is no set duration allowing it, but with a trust, your beneficiaries can receive assets much sooner. In many cases, probate can take over 1-2 years and involves extensive paperwork, court appearances, and excessive attorney fees. A trust administration, on the other hand, will likely take less than half that time.
2. A Trust Can Minimize Your Estate Taxes:
A trust can help you avoid federal estate taxes and decrease the size of your taxable estate. Generation-skipping is another way to avoid paying taxes each time someone dies, helping you transfer your wealth to future generations without paying excessive taxes.
3. You Have More Control Over the Distribution of Funds in a Trust Than With Other Types of Investments:
With a trust, you’re able to dictate what happens with your assets and how they are distributed. Through a trust, you can designate who your beneficiaries are, determine how much they will receive, and what they are allowed to spend the money on.
During your lifetime, having a trust will also allow you to maintain control of your assets as well as provide legal guidance on how your assets will be managed and administered when you pass away. Trusts allow you the flexibility to control challenging situations.
In the case of owning a business, a trust will allow that business to continue to operate free of interruption in the event of your passing.
4. Trusts Can Protect Your Property From Lawsuits and Creditors:
Having a trust will make it so that creditors and potential litigants cannot take any action against your beneficiaries. This is because a properly set up trust will have co-trustees who can block any such creditor claims or potential litigation. A great example of this would be with an irrevocable farmland trust.
5. You Might Be Able to Use Trusts for Charitable Giving Purposes, Too:
A charitable legacy is a trust that you usually establish with your estate, and then upon death, the proceeds of the assets are used for philanthropic purposes.
6. Trusts Can Be Created for Any Type of Asset - Not Just Money or Property:
Living trusts are very flexible depending on your local state allowances. There are trusts that can be created for your home, vacation home, rental properties, bank accounts (both savings and checking), stock trading accounts at your brokerage which can contain stocks, bonds, ETFs as well as mutual funds, your business, cars, boats, jewelry, and even pets.
7. Trusts Can Provide Your Family Privacy:
Probate court is a matter of public record. This means your family’s private financial matters become public in the case of the settlement of a will. Assets placed into a trust maintain the privacy of your family’s financial matters.
A trust is a powerful estate planning tool that can provide peace of mind. Do you have a trust in place that will meet your needs in the future?
If you want to protect your assets, ensure that they are distributed properly after death, and have the flexibility of controlling them during life without court interference, a trust may be a good option for you.
There are many benefits to creating a trust, but it’s important that you work with certified professionals who know how various types of trusts can benefit your estate plan. If possible avoid pitfalls by making sure the person helping draft this document knows what type they will be working on before getting too far into writing – mistakes down the line could cost valuable time and money!
Trusts can provide estate protection and peace of mind
When it comes to trusts, there’s no one-size-fits-all because everyone’s needs are different when constructing their estate plan. There are many considerations and factors involved in creating an effective long-term strategy that will work for you!
Your family will be grateful to have an attorney who understands trusts and estate plans. They’ll make sure you don’t leave any loose ends behind so that your loved ones are taken care of in the event something were ever needed for them or their future generations alike!
When you work with the knowledgeable lawyers at Heritage Law we can help to establish the type of trust that will be most beneficial for your situation. We have nearly a decade of experience in this area, so contact us today for your free consultation.
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