What is a Trust and Why Do I Need One?
A Trust is a planning tool that helps avoid probate and distribute your assets in a very specific way that is dictated by you. Establishing a trust can help your family avoid thousands of dollars in probate costs, taxes, and time – usually avoiding months of time dealing with probate courts. A trust is a planning vessel that holds your assets on behalf of your chosen beneficiaries. A trust is managed by a Trustee, which in most instances is you. Also, creating a trust if you have a special needs dependent can be monumental in ensuring your loved one is well taken care of after your death. A trust can provide ongoing financial support for a child or other loved one who may never be able to manage the assets themselves. Providing the inheritance to them directly can also disqualify them from receiving some forms of government support.
The most common used trust is a revocable living trust. can help assets pass outside of probate, yet allows you to retain control of the assets during your (the grantor's) lifetime. It is flexible and can be dissolved at any time, should your circumstances or intentions change. A revocable trust typically becomes irrevocable upon the death of the grantor.
You can name yourself trustee (or co-trustee) and retain ownership and control over the trust, its terms and assets during your lifetime, but make provisions for a successor trustee to manage them in the event of your incapacity or death. Although a revocable trust may help avoid probate, it is usually still subject to estate taxes. It also means that during your lifetime, it is treated like any other asset you own.
Another monumental benefit of establishing a Trust is PRIVACY. Did you know that a will is public record? That’s right, if you just have a will then anyone can look up your estate and see what you have after your death. Privacy is so important, especially in today’s age and protecting your estate from nosey or predatory people can be one of the smartest things you do when planning to protect your estate.
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