“Do I need a trust?” is one of the most frequent estate planning questions our attorneys at Schlegel Livingston, LLC get asked by our clients. Most people realize that trusts can bring certain financial benefits in the context of estate planning. However, relatively few know exactly what these benefits are and are unsure if creating a trust is worth the trouble. Others may feel that trusts only make sense for the extremely affluent and are not viable or practical for an average person.
In reality, however, even if your estate is moderate or small in terms of size and wealth, there are tangible financial and organizational benefits to be gained from creating a trust. In this article, we will explore the 3 most important reasons why you may need to set up a trust for your estate.
- Avoids Probate
The probate process can be long, costly, and inconvenient for everyone involved. However, by creating a trust, you can not only avoid probate, but you can also make sure your wealth will be distributed in a much faster and more effective way. This is because, according to the law, assets and property held in a trust do not go through the probate process.
You can retain control over assets in a trust during your lifetime by appointing yourself as a trustee. In this case, you must also name a successor trustee – that is, a person who will manage the trust in the case of your death or incapacitation. The successor trustee will make sure that, after your passing, assets and property held in the trust will be distributed according to your wishes to the chosen beneficiaries.
- Keeps Things Private
Because a Will itself must go through a court-supervised probate process, all of its contents will become public record. This means anyone will be able to read it and learn not only how much wealth a deceased person accumulated in his or her lifetime, but also how they divided their estate among the beneficiaries. The terms and details of a trust, however, remain completely confidential. In the case of the trustor’s death, only the trustee and certain beneficiaries will be informed about the terms and details of the trust. This is a vital protection and a huge benefit for everyone who values privacy – both for their own sake and that of their family members.
- Protects Your Minor Children
A life insurance policy or money gathered on a retirement account are likely among the largest and most valuable assets young parents with minor children may have. If both parents die, however, these assets won’t immediately benefit the minor. Rather, they will be placed in a guardianship with a guardian chosen and supervised by the court until the child becomes a legal adult at 18.
In order to gain more control over this process, the parents can set up a revocable living trust and name it as the beneficiary of their insurance policies or retirement accounts. In that way, the fund’s trustee – and not the guardian appointed by the court – will be able to manage the assets for the benefit of the children. The terms of the fund can also precisely govern both the age when the children will receive the inheritance – for example, 25 or 30 instead of 18 – and any other conditions upon which they access the assets held in the trust can be bestowed on them.
Do You Need a Trust? Contact Estate Planning Attorneys at Schlegel Livingston, LLC
After reading this article, you may reach a conclusion that creating a trust could benefit your estate and serve your financial interests. If so, you should realize that trusts are more advanced estate planning tools and, in order to fully reap the benefits a trust may entail, you should create one in close cooperation with your attorney. Schlegel Livingston, LLC are estate planning attorneys with versatile experience who will help you set up a trust carefully attuned to your financial situation and needs of your estate. Contact us today to talk about your estate planning options.
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