A good estate plan, including a will, can help ensure that your final wishes are fulfilled after you pass away. For example, your will could clarify that your assets will be distributed to your spouse, children, siblings or loved ones. This can greatly help grieving family members get through the difficult time following your death.
But, should you consider a trust instead? A trust removes your assets from your estate and puts them under the control of a trustee who will make sure that they are used according to the rules you set up. There are several benefits to making a trust, including:
You avoid probate and unnecessary estate taxes
When you have a will, then your beneficiaries may have to wait until probate is over before they acquire any assets. During probate, the executor of the estate will wrap up any final matters regarding your assets and property. Probate could last a long time and you could make a trust to help ensure your heirs get their inheritance immediately.
Furthermore, your estate could be heavily taxed and your heirs wouldn’t get a full inheritance. By putting your assets in a trust, you may be able to circumvent most estate taxes.
You can retain control of your assets after death
You likely want your hard-earned assets to be put to good use. You can’t exactly know what your heirs will do with your assets after you die – but a trust can give you some control. For example, you could use a “dead-hand control” method to place stipulations and conditions on how your assets are used. You can then safeguard those assets from being used recklessly or lost to foolish mistakes, like gambling debts or an heir’s bad marriage.
Understand your legal options
Trusts are highly complicated legal documents. Without understanding your legal options, you could draft a trust that works against your wishes. Experienced legal guidance can help you understand if a will, a trust or both best suits your goals for your family’s future.