Got peace of mind? That is what you get when you set up an estate plan. Having one in place reassures you that your assets are managed according to your stipulations while living and after your death. Although many people look at a will as the focal point of an estate plan, the fact remains that wills can be contested and have to move through the often frustrating probate process. What is the answer to protecting your assets for future use by named beneficiaries? It is called creating the best trust for estate planning.
A trust represents a legal agreement between two parties, the grantor of the trust and the trustee. The grantor establishes the terms and conditions for a trust and then transfers assets into it for future distribution. Grantors name trustees to manage their trusts according to the terms and conditions written into the trusts. Some trusts allow the grantor to acts as the trustee as well.
If you want to set up a trust, you name beneficiaries that can be your spouse, children, siblings, and close friends. You also can name a charitable organization as a beneficiary of your trust. Any person or organization designated as a beneficiary of a trust receives assets from the trust based on the stipulations set forth by the grantor.
Here are some of the assets you can transfer into a trust:
Which is the best trust for estate planning? The answer depends on your unique financial situation. Let’s quickly review the two primary types of trusts. When you meet with one of our estate planning lawyers, we will help you select a trust that is either revocable or irrevocable.
A revocable trust allows you to maintain control of every asset placed in the trust. You can amend the stipulations and revoke some aspects of a revocable trust to meet changing financial circumstances. Often referred to as a living trust, a revocable trust protects your privacy while preparing your estate for a smooth transition when you die or if you become incapacitated.
Assets protected in a revocable trust pass to your named beneficiaries faster because you avoid the probate process.
You cannot amend or revoke any of the terms and conditions that are written into an irrevocable trust. This means the assets you place in this type of trust no longer belong to you. Placing your assets in an irrevocable trust helps you minimize estate taxes, get protection from creditors, and provide for every member of your family that is younger than 18 years old
A carefully thought-out estate plan protects your financial interests to ensure you take care of loved ones. Although you can create a will as part of your estate planning strategy, opening a trust does a much better job protecting your assets for much faster distribution to your named beneficiaries.