Trusts are a valuable estate planning tool, especially if you want to minimize the impact of taxes on your estate and intended beneficiaries. However, some people hesitate to take advantage of trusts because of the following misconceptions:
It is only for the rich
Trusts are among the tools wealthy people use to protect their assets, but they can benefit people of any financial position. After all, the probate process generally happens after a person dies, even when they are not rich. Creating trusts helps reduce the cost and time associated with probate.
Moreover, trusts help you maintain your privacy as they are administered privately, unlike wills which usually go through probate. Like other documents that go through a court, wills often end up in public records.
It takes away control of your assets
On the contrary, trusts usually improve a grantor’s control over their assets. For instance, when creating your trust, you may name yourself the trustee, allowing you to retain control over your properties while alive. You may then set up conditions for how the assets in the trust will go to your intended beneficiaries. Some grantors, for example, require beneficiaries to reach a certain age before receiving the assets in the trust.
It is costly and complicated to create
Creating a trust may be more expensive than writing a will, but the benefits usually outweigh the drawbacks. This is especially true when you consider how trusts can help reduce the costs associated with probate.
Moreover, there are various resources available that may help you create trusts. An estate planning attorney can help you draw the documents and review them to ensure they are legal and fulfill your intended purpose.