1. Trusts avoid the probate process:
While assets controlled by your will have to go through probate in order to be verified and distributed according to your wishes, trust assets usually don’t. A will becomes a part of public record, while a trust agreement stays private. When you establish a trust during your lifetime, you only need to deal with your attorney and your trustee to execute the agreement. It should be noted that you can also stipulate in your will that you want to create a trust upon your death; in this instance, your estate will go through probate prior to the trust being established.
Privacy is important if you want to keep your family’s financial matters outside of public view. Plus, by avoiding the probate process, trusts are often a quicker and simpler way to have your assets distributed when you die. You may even decide to have your will state that any assets held outside of a pre-existing trust at the time of your death transfer into the trust when you pass away. When you’re dealing with the death of a loved one — or the transfer of assets from one person to another — you likely want the change to be as seamless and private as possible. Creating a trust can help you achieve both of those goals.
2. Trusts can offer parameters to use your assets
Whether you establish a trust under your will and/or create a separate trust agreement during your lifetime, trusts give you the ability to truly customize your estate plan. You can include conditions such as age attainment provisions or parameters on how the assets will be used. For example, you can state that you’d like the money in a trust to be given to your grandchildren only once they turn 18 and only to be used for college tuition. Or you might decide to limit how much money a beneficiary can receive from the trust each year if they’re someone who may need extra help managing money.
3. Revocable Trusts can help during illness or disability
Wills only go into effect when a person passes away, but a revocable trust established during your lifetime can also help your family if you become ill or unable to manage your assets. If that happens, your trustee can make distributions on your behalf, pay bills and even file tax returns for you. You can choose ahead of time who to appoint (through the trust) to manage the assets.
Though no one likes to think about these scenarios, building in provisions like these can safeguard your family from having to make decisions without knowing your wishes during difficult times. In order to find out about the other advantages of a revocable trust please make sure to contact an attorney in your area to best explain this instrument to you and if this instrument is beneficial in your particular scenario and estate planning.
