Estate planning is an uncomfortable process. Most people find it difficult to consider how their belongings will be distributed following their death. If you fail to make these choices, however, the alternatives are often much less desirable.
Not only does failure to create an adequate estate plan increase the chances that fighting will occur in your family, unnecessary taxes are also common. These challenges as well as many others can be avoided through the creation of a trust.
Despite this, the myth persists that trusts are only for the extremely wealthy and that they take a great deal of funds upfront to create. In reality, trusts are a powerful tool for most people because they offer the ability to great simplify things after a person’s death.
The Role of Trusts
There are a number of different types of trusts that can be made part of a person’s estate plan. The most common type of trust used is a revocable living trust, which lets a person clearly outline how assets in an estate will be administered following that person’s death.
Trusts also let people avoid the probate process, which is the legal process through which a will is declared valid. Many times when an estate passes through probate, at least 5% of the estate is lost to taxes.
While trusts are one option to avoid probate, some of the other choices include joint property ownership and payable on death transfers.
The Cost of Creating a Trust
The cost of creating a trust can change greatly based on the complexity of a person’s situation, but many people discover that the fees are much more reasonable than they thought.
After creation, any assets that a person selects will be assigned to the trust. A pour-over will can also be written to handle any additional assets that might remain in the trust.
With revocable trusts, a person will have control over them while alive and can make changes if necessary or even revoke them entirely.
Other Benefits Offered by Trusts
Some of the other benefits offered by trusts are greater control and understanding over how a person’s estate will be administered.
By outlining your goals with a trust, you can make sure that your long term interests are protected and that conflict among surviving loved ones is minimized. When minor children are left behind, trusts are particularly helpful in clearly outlining the conditions that must be satisfied before assets in the trust are administered to them.
Trusts can also be helpful in passing assets to loved ones with special needs, who are often disqualified from receiving government benefits if they receive payment through another method.
Many blended families also discover that trusts are helpful in removing some of the uncertainty about how assets should be passed.
Because trusts are often difficult to create, however, it is a wise idea to obtain the assistance of an experienced estate planning attorney if you are interested in creating one.
Speak with an Experienced Estate Planning Lawyer
Trusts can play an invaluable role in the estate planning process. If you or a loved one has questions or concerns about this process, you should not hesitate to speak with an experienced attorney.
Contact attorney Jim A Lyon today to schedule a free initial consultation.