When planning for the future, many individuals opt for a simple will, believing it to be a comprehensive solution for their estate planning needs. While a will is indeed an essential tool in a person’s estate plan, it is often not sufficient on its own. A trust, alongside other estate planning documents, plays a vital role in establishing a well-rounded estate plan.
Below are some reasons why you should include a trust in your estate plan.
Providing a certain level of control
A trust usually allows for more control over an individual’s asset distribution compared to a will. While a will only takes effect upon your passing, a trust can be designed to manage your assets according to your specific instructions, both during and after your lifetime. This includes outlining when and how your beneficiaries will receive their inheritance, potentially safeguarding your legacy from misuse or mismanagement.
Potentially minimizing estate taxes
Establishing a trust can be a strategic move to potentially minimize estate taxes and maximize the inheritance for your beneficiaries. For instance, irrevocable life trusts are generally not part of your taxable estate, thus reducing the overall estate tax liability during your estate’s administration.
Offering a significant degree of privacy
When a will goes through probate, it becomes a matter of public record, wherein anyone can access details about your estate, including your assets, debts and heirs. In contrast, a trust typically does not go through the probate process. Since the trust holds the assets and outlines their distribution upon your death, the details of the trust remain private, confined to the trustees and the beneficiaries.
Expanding your options to protect your future
While a simple will is a good starting point when estate planning, it might not be enough to address your unique needs. Creating a trust and considering other estate planning tools are crucial to protecting your assets and ensuring their distribution will be according to your wishes. It is advisable to consult with an experienced estate planning attorney to create a plan that meets your needs to provide you and your loved ones with peace of mind.