A trust gives you the opportunity to have control over what happens after you pass. It’s a good feeling when you know that your property and assets are in good hands.
We share the five benefits of having a trust here:
- A Trust Avoids Probate
- A Trust Could Save You Money and Provide Tax Benefits
- A Trust Protects Your Privacy
- A Trust Carries Out Your Wishes Even If You Become Incapacitated
- A Trust Provides Certainty and Peace of Mind
Related Article: Trusts: What is it and Why Do I Need it?
1. A Trust Avoids Probate
If you have the choice, it is always easier to avoid probate, and with trusts, you are able to do so. Probate is a court-supervised process of distributing a deceased individual’s estate. Depending on the estate, the assets, and the individuals involved, probate can be lengthy and costly, which may delay distributions to your beneficiaries and decrease what may be inherited.
By placing your property in a trust, you can avoid probate because the assets are distributed according to the instructions set forth by the creator of the trust without court intervention.
A trust can be especially helpful if you own property in your own state because it’s passed directly to your beneficiary and is not subject to probate in that state.
2. A Trust Could Save You Money and Provide Tax Benefits
In addition to saving money on probate costs, a trust can be less expensive than a will if someone decides to come forward and contest the distribution.
Trusts can potentially provide savings for married couples in the form of joint trusts, but usually, there isn’t much difference in estate and income tax savings with a trust.
Trusts can either be revocable or irrevocable. A revocable trust gives you the option to make changes after it’s signed, but, depending on its terms, it may or may not lead to tax advantages further down the line. On the other hand, an irrevocable trust does not allow you to make changes after the agreement is signed.
3. A Trust Protects Your Privacy
When you forgo probate, it gives you more privacy. A trust is a private document between the parties involved and does not become part of the public record. A will, on the other hand, is a public record, so everything in it becomes public as well.
4. A Trust Carries Out Your Wishes Even If You Become Incapacitated
If you become ill or incapacitated, the person you have chosen as a successor trustee can step in and manage your affairs without needing the court to intervene or assign a court-appointed conservator for your affairs.
With a revocable trust, if you become incapacitated your trust retains control of your affairs and your customized estate plan. You can also add parameters such as age attainment provisions or guidelines on how the assets will be used.
5. A Trust Provides Certainty and Peace of Mind
When a trust is put together correctly, it establishes a clear plan as to how your assets should be handled. This can help prevent you from unintentionally disinheriting someone, provide future care for a loved one with special needs, and even protect assets from falling into the hands of certain individuals.
With all of these benefits, it can put your mind at ease knowing that your estate will be handled exactly as you wish. The existence of the trust can also provide certainty and comfort to your loved ones during a stressful time, for everything is already clearly outlined for them.
Related Article: How Can I Help My Parents Set Up a Trust?
Need help with your trust documents?
Marcia L. Campbell, CPA is committed to helping each client plan for the personal and financial decisions that need to be made for the future. Marcia’s team has a genuine interest in your well-being and has a well-established list of services to help guide you through this process.
If you need help, please contact us by filling out a Contact Form or giving our office a call at +1(951)686-3608.