Thinking about the future is something that most adults often do. Those thoughts are often limited to what they want to do while they’re still living; however, thinking beyond that is a good idea.
All adults should think about getting their estate plan together so their loved ones have it to follow when the time comes. A comprehensive estate plan relays your wishes for your end-of-life care and provides directions for giving assets to your beneficiaries.
You can list your assets and where they need to go in your will, but that will have to go through the probate process. This can take time and the proceedings are entered into the public record. Alternatively, you can use trusts to handle asset distribution after your death.
What is a trust?
A trust is a legal tool that allows you to set specific terms for how your assets are to be handled. You fund the trust by placing the assets in it. Once you fund the trust, it’s managed by the trustee. If you opt for a revocable trust, which means you can change the terms or cancel the trust, you can act as the trustee until you pass away. If you opt for an irrevocable trust, the trustee you name will have complete control over the assets.
Why should you consider a trust?
Both irrevocable and revocable trusts enable your beneficiaries to receive their inheritance in a timely and cost-effective manner. Because these don’t go through the probate process, there’s also more privacy when you use trusts.
If you opt for an irrevocable trust, you’re also helping to protect the assets you want to leave to your beneficiaries. One unique feature of these trusts is creditor protection. Since you don’t own or control the assets, creditors can’t stake a claim to them if you owe money or have a judgment against you.
Trusts are only one part of a comprehensive estate plan, so you need to consider how they work with the other parts of your plan. Working with someone who’s familiar with your circumstances and wishes and who understands estate planning can make this process less stressful for you.
