Most people use their last will and testament to pass on assets to their designated heirs after they die. Some also opt for using a trust to pass on assets and other valuables.
Basically, a trust is a legal arrangement in which you can place your possessions so they can be used by you or your heirs in the future. Contrary to belief, a trust is not just for the rich and famous. A trust offers greater control than the last will on who will inherit your assets when you pass on. Unlike a will, a trust can also include instructions such as how or when your designated beneficiaries will assume control of your assets.
So who needs a trust?
While you can accomplish most of your wishes using the last will and testament, the probate process (when your will is acknowledged by the court) can still get complicated. Having trust alongside your will ensures that your assets do not have to go through the long and costly probate process.
As already mentioned, trust also gives you more control over exactly what happens to your estate and how it is distributed to your beneficiaries. This can be useful in a number of situations, including limiting an underage beneficiary’s access to their inheritance, facilitating the care of a beneficiary with special needs, avoiding estate taxes, and protecting assets in an event of a divorce.
Why you should include a trust in your estate plan
As already mentioned, including a trust in your estate plan offers a number of benefits. One notable benefit is it allows the grantor to control how their assets are distributed to beneficiaries upon passing on. This contrasts with the lack of control over asset distribution through the will and last testament.
Here are additional benefits of having a trust in your estate plan:
- Avoiding a protracted and costly probate process
- Ensuring the privacy of individual and family assets
- Protecting assets into the future should the grantor be incapacitated or die
- Taking care of heirs with special needs
For most people, having an estate plan that includes a trust is a great way of accomplishing their goals both in life and in death. With a thorough trust document, you can have peace of mind knowing that your future, estate and loved ones are secured.