Many families prepare a Will that would help distribute their assets after they pass away in estate planning. But one more important aspect that can offer exclusive advantages in estate planning to everyone in your family is trust. It is a legal contract prepared by a lawyer with the trustee’s name. It ensures that every asset of yours is being managed as per your wishes while you are alive and after death. But many people are not sure whether to consider a trust or not. Are you also in a dilemma? If yes, you must read this blog to find out information on its importance.
1. Eliminates The Probate Process
When assets are controlled as per your Will, it has to go through probate to obtain the verification. After that, it is distributed as per your wish to the respective family members. But in trust assets, it is not needed. A trust always stays private, while a will is a part of the public record. During your lifetime, while preparing a trust, you have to speak only with your trustee and lawyer to execute the agreement. Remember that it needs to be stipulated in the Will to create a trust upon death. In this situation, your estate will undergo probate before the trust is being prepared. A living trust lawyer can assist you with the necessary details.
2. Maintains Privacy
Privacy is always important when it comes to keeping the financial matters of your family outside public view. In addition, by eliminating the probate procedure, trusts can often be a simpler and quicker way to have all assets distributed when you are no longer there. Also, you can have your will state that the assets held outside the trust need to be transferred after your death. In this way, you will have seamless access to the necessary things. Thus, it is said that creating trust will help maintain privacy and get your objective fulfilled.
3. Provides Tax Benefits
Trusts can be irrevocable or revocable. It means they can be amended irrespective of whether the trusts are created or not. A revocable trust lets you make necessary changes after you have signed. But there are terms and conditions which can vary from one situation to another. Also, it might not lead to tax benefits down the line.
But an irrevocable trust is something that you cannot change after the final papers are signed. It’s because you have transferred assets of the estate, but tax benefits are possible. Contributing to trust acts like gift tax requirements during your entire lifetime.
4. Helps To Take Care Of The Family
A trust agreement will help take care of all your family members when you are no longer with them. With initial funding, you can have an annual exclusion gift attached to an irrevocable trust every year. However, for this contribution, there is no need to pay any additional tax. If you need details on ways to prepare a trust, seek advice from the experts. The professionals can provide all necessary information whenever required.
5. Specific Parameters For Using Your Assets
Creating a separate trust for a lifetime or establishing a trust under a Will, offers the ability to customize estate plans. It includes details like how the assets will be used, provisions for age attainment, etc. Like, in the trust, you can state when to give your grandchildren assets, once they are above 18 years or something else.
Otherwise, you can state the amount of money a beneficiary might receive every year. A qualified and efficient trust expert can help through several possibilities before the actual draft is being prepared.
6. Helps During Disability Or Illness
Will comes into effect after a person has passed away, but trust is not the same. A revocable trust prepared during your lifetime will help your family if you fall ill all of a sudden. In this situation, your trustee can make necessary distributions from your side. It can clear off the bills and file tax returns if needed.
Appoint an efficient trustee who will manage all the assets in your absence. No one wishes to think about this scenario, but safeguarding your family’s interests will help you decide during difficult times.
7. Allows Flexibility
While creating a trust, you have the flexibility to make necessary changes in the terms and conditions. Look for a trustee who can assist you in preparing a trust according to your requirements. They can understand your requirements and add all the necessary details as required. A family trust lawyer can tell you which specifications need to be removed.
Life is unpredictable, and by preparing a trust, you can adapt your estate plan in the best possible way. Hence, you can speak with the experts, collect all the information, and prepare a trust accordingly.