By: Solid Serenity Legal Solutions
Trusts have long been associated with the wealthy, but trusts have benefits for everyone. Trusts have many great uses that can help people at every level of wealth best plan for their estate.
Planning for what happens after your death is not something that excites most people, but the alternative is for your estate to go through probate which can lead to family feuding, unnecessary taxes, and stress to your family by having to go to Court to transfer the title to your assets.
These problems and others can be avoided by setting up a trust. While there are many different types of trusts, the most common trust used for these purposes is a revocable living trust. A revocable living trust allows you, the grantor, to specify exactly how you want your estate to be distributed to your heirs when you die and helps your family avoid the probate process, while allowing you the freedom and flexibility to manage your assets any way you wish during your lifetime.
(1) Avoid Probate
Probate is a legal process in which the heirs of a Decedent are determined through the court system. Probates can tie up assets for months and lead to attorney and court fees piling up for the heirs.
Depending on where you live and the specifics of your situation, probate can easily add up to at least five percent of the total value of your estate. The best way to avoid probate is to set up a trust.
The cost of setting up a trust will depend on where you live and the complexities of your situation but will likely end up costing less than a probate and would allow you to determine where your assets are distributed, how, and when, after your death.
Trusts can hold every asset that can be probated such as everything from brokerage accounts and real estate, to jewelry, artwork and other valuables.
(2) Flexibility and Control
Another perk of the revocable trust is that it allows you to change, or even revoke, the trust at any point during your life. The ability to change your trust varies from who gets what, to how the assets are distributed, to when and where. You can change anything you need at any time. And, we recommend making changes as important life changes occur.
Other major benefits of the revocable trust are clarity and control. While a Will or probate distribute all assets outright- meaning any gifts to minors go directly to their Guardians, revocable trusts allow you to choose ages and conditions of when heirs can get their inheritances and also allow you to provide for dependents with special needs.
Heirs with special needs have to follow certain rules for distributions to keep their government benefits. These rules can be followed by using special trusts that are permitted under Social Security rules and allow for disbursements to cover costs related to maintaining a beneficiary’s health or comfort, without disqualifying them from Social Security, Medicare, or other benefits.
(3) Family Concerns and Privacy
Trusts also remove the guesswork from estates involving second marriages and blended families by keeping the estate out of the probate courts where disputes as to who should get what can start to take place. Trusts also allow you a measure of privacy that you would lose with a probate, which are public record.
All of these reasons for getting a trust applies just as much, if not more, to the average American as it does to those who are rich and famous. Whether you want your estate planning to include a trust or not, its important to talk to your estate planning attorney to determine what is the best route for you.
Call your trusted advisor today to discuss your goals and plan for your estate and family wealth!