5 Benefits of a Trust
No matter the size of your home, everyone has an estate. Your estate includes your car, home, bank accounts, life insurance, and investments. However, estate planning goes beyond just these possessions: it involves the steps you take during your lifetime to strategize and prepare for incapacity, illness, and passing on. Estate planning is ultimately taking care of your loved ones by taking care of yourself.
One tool often used in estate planning is a living trust, also known as a revocable trust. A living trust offers myriad benefits to its creator. Is a trust an appropriate planning tool for you? It depends, of course, on your unique financial situation, family needs and goals.
Trusts are growing in popularity because they are so flexible and able to address a variety of objectives, from the simple to the complex. It is a good idea to consult an attorney about the process of establishing a trust and whether it is beneficial for you. Contact Paula at www.paulahannahlaw.com
Here are five benefits to having a trust:
1. Protecting Your Children
Establishing a trust is an excellent way to take proactive steps in protecting your children. If they are minors upon your passing, the trustee you designate would manage the assets in trust until your children reach adulthood and are mature enough to manage the assets themselves. Likewise, your adult children may lack the knowledge or maturity to properly manage the assets themselves, and your trust agreement can provide that the trustee will manage the funds for them.
2. Avoiding Probate
Having your assets in the trust will allow your estate to avoid the probate process, which is overseen by the courts for the purpose of transferring assets to beneficiaries. This process can be costly, both in time and finances. The result is delayed or reduced asset distributions for your beneficiaries. However, if you have established and funded your trust, your assets will transfer directly to your named beneficiaries and avoid probate altogether. This allows your estate and the individuals named in your trust to maintain privacy, as the trust administration process is not a public affair overseen by the government. There is no requirement for the trust document to be filed with the state or county you live in.
3. Providing Control of the Use of Your Assets
Trusts give you the ability to truly customize your estate plan. You can include conditions such as age attainment provisions or parameters on how the assets will be used. For example, you can state that you would like the money in a trust to be given to your grandchildren only once they turn 18 and only to be used for college tuition. Or you might decide to limit how much money a beneficiary can receive from the trust each year if they are someone who may need extra help managing money.
4. Saving Money
Although initially more expensive to establish than a will, a properly established trust can save money in the long run. Money is saved by avoiding a probate process upon your passing. If you are interested in establishing a trust that provides more in-depth tax planning, helping to reduce estate taxes, you may want to consider an irrevocable trust.
5. Providing Peace of Mind
Setting up your living trust has many different benefits, most importantly, providing peace of mind for you and your loved ones. The trust provides a clear plan to be followed by your successor trustee in the unfortunate event of your incapacitation or passing.
Paula Hannah is a second generation Arizona native who has lived in Arcadia for the past 15 years. Her love of Arcadia began when she was a toddler and would ask her parents to drive her down ‘horsey street’ (Exeter) to visit the many horse properties that lined the street at the time. Although the area has changed significantly, Paula’s love of Arcadia continues. Arcadia’s neighborly community, large lush lots, and central location make it the perfect place for Paula and her husband, DJ, to raise their two young daughters.
Paula is proud to help residents of Arcadia and clients throughout Arizona provide for and protect the people they love, ensure their wishes are met, protect their wealth, and create lasting legacies. Paula understands that life can get busy, and it is easy to procrastinate on doing the really important things – like making sure both you and your family are protected in the event of your incapacity or death. Knowing that all adults, regardless of net worth or marital status, need comprehensive estate planning to ensure that their wishes are followed and their loved ones protected, Paula has a passion to help people create estate plans that accomplish exactly those goals.
This article is for educational and informational purposes only, to give you general information and a general understanding of the law, not to provide specific legal advice. The article should not be used as a substitute for competent legal advice from a licensed professional attorney in your state.