One of the goals of an estate plan is getting assets to beneficiaries. Some people opt to do this through their will, but others choose to establish a trust that can make it much easier to get the assets to the intended individuals or other entities.
A trust is a legal tool that holds the assets until they’re ready to be handed down to another party. Assets that are held in a trust are controlled by the trustee until they’re fully passed along to the beneficiary.
There are 2 categories of trusts
There are two broad categories of trusts: revocable and irrevocable. Revocable trusts can be changed as you see fit, and you continue to control the assets in the trust until you pass away. An irrevocable trust is set in stone and can’t be changed unless the court or all named beneficiaries agree to the changes. The assets are controlled by a trustee instead of being controlled by you.
Trusts have benefits
One of the most important benefits of trusts is that your beneficiaries can receive the contents of the trust without having to go through the probate court. This offers them privacy since the trust’s terms aren’t part of a public court record. It’s often faster and less costly for them to receive them using a trust.
If you establish an irrevocable trust, the assets within the trust have protection from your creditors. The assets in this type of trust are owned by the trust. Since they aren’t yours any longer and you don’t have control over them, the assets can’t be claimed if there’s a judgment or collection against you.
Having a comprehensive estate plan can make it much easier for your loved ones to handle your affairs after you pass away. Discuss your wishes and the circumstances of your estate with someone who can help you determine if establishing a trust will be beneficial. Getting everything set up now may give you peace of mind since you know your beneficiaries have a plan reflecting your wishes to follow.