People often create a will to direct the distribution of their assets after death. But you can also set up a trust to achieve the same objective. The trust is a legal document that your lawyer will prepare. The document will specify a trustee who will distribute your assets as you wish.
So, why should you prepare a trust? Read on to find out.
Probate is a court process determining the settlement of your debts and assets after death. This process may be necessary if you create a will instead of a trust.
The probate process involves the payment of multiple fees. For example, you may have to pay legal commissions and county taxes. The executor will also ask for payment when handling your will. The costs can quickly mount if you own assets in multiple states. Furthermore, the probate process can take several months to complete. The delay may cause financial problems for the beneficiaries.
On the other hand, a trust doesn’t have to go through court. The trust manager has the sole responsibility to manage your trust upon death. Hence, you will avoid costly court processes. Moreover, your beneficiaries will get more money.
Another disadvantage of the probate process is the lack of confidentiality. In many states, a will becomes a public document after your death. A public will may encourage other potential heirs to contest the document in court. In contrast, a trust is a private document that protects the confidentiality of the beneficiaries and the property.
A trust can help if you get incapacitated and can’t take care of yourself. The trust arrangement is better than relying on your relatives’ goodwill or waiting for directions from the court.
Once you are unable to discharge your daily duties, the trust executor will step in. The executor will organize your medication and manage your assets. As a consequence, you won’t have to deal with an executor that the court appoints.
Similarly, a living trust is subject to revocation and modification. This means that you can go to court to contest the alleged incapacitation and regain control of your assets.
Setting up a trust may lead to substantial tax benefits. The tax benefits depend on the type of trust. For example, you can amend an irrevocable trust to take advantage of new tax laws.
An irrevocable trust may also provide avenues for tax savings. A case in point is the potential exemption of your property from estate tax after your death.
A living trust allows you to take care of your loved ones even after you’re dead. For example, you can postpone the transfer of property until your children become adults. The trust also prevents creditors and other individuals from taking control of your assets.
The ability to set up parameters ensures prudent management of your assets. Therefore, you will have peace of mind, certainty, and comfort.
Contesting a trust in court is more problematic than challenging a will. For the court to nullify a trust, the contestants must provide irrefutable evidence to prove incompetence.
In particular, the plaintiff will have to show that the trust documents are fake. Proving this is difficult if you have been actively managing the trust.
Setting up a trust is one of the best ways to manage your assets during and after your lifetime. The trust can protect your health and interests and ensure prudent property management. However, these benefits will only come to light if you hire a competent lawyer like Harris Shelton. We will work with you to create a trust that adheres to the law and fulfills your wishes.
Contact us for estate planning legal services.