Trusts can save you time, money, and stress when it comes to estate planning. It is important for any family to be prepared for the unexpected or inevitable. We all expect to pass away at some point, and having a solid plan in place will afford you peace of mind for the years to come. No estate plan is more solid than a trust.
What is a Trust?
A trust is straightforward in concept. Once established, a trust can be likened to a shell company or entity designed to hold assets for specific purposes. The individual managing the trust, known as the trustee, is responsible for adhering to the instructions outlined in the trust document.
Why Choose a Trust?
There are numerous reasons to consider a trust. Entire volumes have been dedicated to the intricacies of trust planning. However, some key advantages for the general public can be highlighted without delving into exhaustive detail.
1. Probate Avoidance
One significant benefit of a trust is the ability to appoint a trustee who manages the estate outside of probate court. While a will allows for the nomination of an executor, it necessitates probate court involvement. Avoiding probate can save time and reduce expenses. A trust enables the trustee to manage and distribute assets without court oversight, simplifying the process.
2. Centralized Management
The appointment of a trustee also allows for centralized management of your assets. For example, consider a primary residence. Without a trust, multiple heirs might need to agree on various aspects of the sale, such as selecting a realtor, setting the listing price, and approving repairs. This can lead to complications and delays. A trust appoints a single trustee, streamlining the process and reducing potential conflicts.
Additionally, a trust allows for the designation of successor trustees. If the initial trustee cannot serve, a backup trustee can step in. Co-trustees can also be appointed to monitor each other, ensuring adherence to the trust’s terms. The trustee has a fiduciary duty to follow the instructions set forth in the trust document.
3. Control Over Distributions
The creator of the trust, known as the grantor, maintains control over how the estate is distributed. The grantor can specify the amounts, timing, and conditions for distributions. For instance, distributions can be contingent upon reaching a certain age, completing a milestone such as graduating from college, or achieving a particular life event.
4. Planning for the Unexpected
Trusts provide contingency plans for unforeseen circumstances. For instance, if a primary beneficiary passes away before the grantor, the trust can specify alternative beneficiaries. This ensures a comprehensive estate plan that addresses unexpected events.
Moreover, if a beneficiary becomes disabled and requires long-term care, the trust can protect the inheritance from being spent on care expenses. Instead, funds can be used to enhance the beneficiary’s quality of life, providing amenities, maintenance, and support outside of medicaid expenses.
Summary
Trusts offer significant advantages in estate planning. From centralized control and management, to planning for the unexpected, Trusts are the go-to tool for estate planning attorneys. The advantages of Trusts provide peace of mind and ensure your wishes are honored. Many individuals will attempt to set forth their estate plan through other planning techniques, however, this can lead to unforeseen circumstances. To ensure your estate goes according to your plans, contact Modern Law today.