No one likes to think about their own death. It’s morbid and can be quite depressing. However, if you have substantial assets, minor children or other people who depend on you, failing to create a thorough estate plan could leave them at risk if something happens to you. Why live with the worry about how your assets will be distributed and handled in the wake of your passing? Taking time now to create a last will is a good decision.
If you have a significant estate or if there are complicating factors in your family, creating a trust could be a good decision. Placing your assets in a trust can help your heirs avoid probate court. It can also help reduce the tax burden on your heirs after you die. Most importantly, a trust can give you more control over the handling and disbursement of your assets.
Trusts give you control over your estate assets
Many families have complicated dynamics. Maybe your spouse or one of your children struggle with addiction. Perhaps there’s a compulsive shopper or gambler in the family. You may even have a child with special needs who will require lifelong support after your passing. There are different kinds of trusts that can help you address these issues, and more.
Your trust can limit how much the beneficiaries can spend or withdraw in a given period of time. It can place requirements on their abilities to access the funds. Sobriety, marriage or even ongoing employment could all be conditions of accessing the trust assets. You can also name one or more trustees who you believe will responsibly manage the trust assets and your estate after you die.
Trustees have the authority to make financial decisions on behalf of the trust, as long as those decisions reflect your conditions and all applicable laws. Multiple trustees can serve as a system of checks and balances, protecting the trust against unscrupulous or unethical behavior.
A trust establishes your legacy
Many people are remembered as much for what happens after they die as for what they do in life. If you’ve spent your life acquiring substantial assets, you may want to allocate them to a charity, a scholarship fund or even the care of a beloved pet. A trust allows you to make those designations now, ensuring that you have control over your ultimate legacy.
Whether you’ve already created an estate plan and need to add a trust to it or you’ve put off even drafting a will, educating yourself about the benefits of trusts will be worthwhile. Knowledge about your options will empower you to create a lasting legacy that will make you, and the people you love, proud.