Most people think about their will when they’re discussing an estate plan. While the will is a valuable tool, it isn’t suitable for everything. Establishing trusts can help to ensure that your assets are handed out as you intend.
Trusts have several benefits you should consider to determine if they’re right for your situation. There are many different types of trusts that you can use. You choose one based on your needs and the purpose of the trust.
Trusts can bypass probate court
For many people, privacy after the death of a loved one is important. The estate of a person who dies with a will or without any estate plan at all will must go through the probate process. The probate process is public, so anyone can see who is getting what — and that exposure may be unwelcome. Trusts don’t have to go through the probate process so the beneficiaries can have privacy.
Some trusts can also provide protection from creditors. Trusts are divided into two broad categories – revocable and irrevocable. An irrevocable trust is one that the creator doesn’t have control over, so the contents of the funded trust are protected from creditors. (Creators can still control the assets in a revocable trust, so that type doesn’t offer any creditor protection.)
Putting your assets in a trust for your heirs is also a great way to protect your heirs against their own worst instincts. Trust funds can be protected from division if a marriage goes awry, and they can be structured to prevent someone with poor spending habits or an addiction from wasting the funds.
Estate plans are as varied as the people who make them. Experienced legal guidance can help you decide if a trust will benefit you and your heirs.