In addition to wills and other estate planning tools, trusts are also crucial when it comes to protecting your assets. Trusts offer a wide range of benefits, including providing more control when it comes to asset dispersal.
However, you must understand how trusts work to reap the most benefits from them. Here are some important facts to consider as you establish an estate plan.
Trusts do not go through probate
Unlike wills, the assets controlled by trusts do not go through probate after a person dies. Instead, the assets pass directly to the beneficiaries without the need for probate court. Probate is the legal process of proving a will valid, paying creditors, and passing out inheritances. Avoiding probate saves your estate money, but it can also prevent family strife.
There are revocable and irrevocable trusts
You cannot change an irrevocable trust after creation. However, you can alter a revocable trust during your lifetime if you choose. A special needs trust is a type of irrevocable trust that ensures loved ones with special needs have the financial resources they need to protect them after you are gone. There are also generation-skipping irrevocable trusts suited to estate planners with grandchildren.
Trusts remain private
Trusts also differ from wills in that they remain protected from public view. For example, the owner of any property held by the trust is not made public after the person’s death. If you are a person who prizes their privacy dearly, it makes sense to set up a trust to keep the details about your estate private.
Trusts do cost more to create when compared to wills, especially when your estate has complex needs. However, the benefits far outweigh the costs when it comes to protecting your estate and your family.