When it comes to estate planning, a trust can be an invaluable tool. It allows you to be very specific about how, when and to whom your assets are distributed. On top of that, there are dozens of special-use trusts that could be set up to meet various goals, such as charitable giving, tax relief, and more. In general, the disadvantages of a trust are significantly offset by the numerous advantages that are created by having a living trust.
The biggest advantage of a living trust is that, unlike a last will and testament, it allows you to avoid probate court. There are three main reasons why this is important. Firstly, it keeps records and information about assets private after your death. The probate process to which wills are subject can make your estate an open book, as the documents entered into it become public records, available for anyone to access.
Secondly, it saves time and money. The probate process can be lengthy and expensive, so avoiding it can save your family from unnecessary stress and financial burden. Lastly, it ensures that your assets are distributed according to your wishes in a timely manner. Trusts can be useful estate planning tools for many people, but they may not be worth the expense for those who don't have many assets.
Although estate planning is sometimes considered only for the ultra rich, alternatively, trusts can be useful planning vehicles regardless of age or net worth. If the trust assets are, for example, a summer house or a favorite painting, they can be enjoyed both after being deposited in a trust and before and possibly more, because the grantor knows that the property will ultimately go to support a worthy cause. However, if your home is the only big investment you own, it might be worth using a trust just for that house. Trusts are often wrongly associated with people who might have higher net worth, but they aren't just for rich people.
The cost of a trust may also not be worth it to you if you still plan to have other assets go through probate, especially valuable possessions that could delay the estate or result in a contested will. But given the expenses associated with opening one, it's probably not worth it unless you have a certain amount of assets. In conclusion, trusts can be incredibly beneficial tools for estate planning. They allow you to keep records and information about assets private after your death and save time and money by avoiding probate court. They also ensure that your assets are distributed according to your wishes in a timely manner.
Although trusts may not be worth the expense for those who don't have many assets, they can still be useful planning vehicles regardless of age or net worth.
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