If your estate plan only consists of a will, you may be missing out on the various benefits of a trust. Establishing a trust can help you transfer your wealth and property to your beneficiaries according to your wishes. A trust is simply a legal structure that passes on assets to heirs according to specific instructions. Do yourself a favor and learn about three specific benefits of creating a trust.
1. Avoid going through probate
According to Forbes contributor Erik Carter, you should consider making a trust so that you can ensure your beneficiaries get access to your assets in a timely and private matter. When your estate is transferred through a will, it goes through probate, which is a legal process that can come with frustrating delays, costly fees and a lack of privacy. A trust lets your estate bypass probate so the process is more efficient.
2. Control how and when your assets are distributed
By creating a trust, you can establish how your assets are passed on to your beneficiaries. For example, you can stipulate that children or grandchildren only get money for specific purposes, such as college tuition or medical expenses. You can also make sure that assets are distributed at periodic intervals according to the ages of your heirs.
3. Reduce estate taxes
Different types of trusts can be used to avoid the estate tax. For instance, you may be able to use a trust to pay income to your family members now and leave the rest for charity upon your death. You may also be able to use a revocable trust to fund a credit shelter.
Look into establishing a trust for peace of mind not only for yourself, but for those you love most.