Some people mistakenly think that trusts are only for millionaires. There are many reasons that setting up a trust can help you in terms of protecting what you own, avoiding probate, ensuring the effective distribution of assets after your death and assisting in the management of your affairs if you become incapacitated, mentally impaired or are otherwise unable to do so. With the help of an estate attorney, you can weigh all the pros and cons to see if establishing a trust would be beneficial given your particular circumstances.
Avoiding the probate process
One of the main reasons for establishing a trust is to help your heirs avoid the rigmarole of the probate process after your death. If you only leave a will, a probate judge must determine the validity of the document and appoint an executor for your estate, an individual you might not have wanted in this position. Someone in the office of the probate attorney will manage the ongoing paperwork involved, keep track of deadlines and stay up-to-date with the usual procedures. Issues for your heirs would include the expense of the probate process, such as attorney and executor fees, court costs and appraiser’s fees. The main issue, however, is the length of time the probate process takes-normally one to two years, during which time property is completely tied up. Having a trust circumvents this process and enables a faster, smoother transfer of assets to your beneficiaries.
Protecting assets, reducing taxes
You can place most of your assets in a revocable living trust, so called because you can change your mind and revoke it at any time. You also need to have what is called a “pour-over will,” which is intended to absorb into your trust any assets that might exist outside of it in the event of your unexpected demise. The trust you establish can also provide a way for you to avoid or reduce estate taxes because the assets placed into a trust are not subject to these taxes.
Preparing for the unexpected
Setting up a revocable living trust is an excellent way for you to ensure your affairs continue to be discharged properly if you become ill or disabled and cannot manage them on your own. In so doing, you need to appoint a trustee who can manage not only your own affairs, but also those of any beneficiaries you may have been providing for.
Getting expert advice
There are many reasons for establishing a trust, but keep in mind that for some people, a will might be the best document to have. If you would like to discuss the pros and cons of each, contact a knowledgeable estate attorney.