A lot of thought goes into your estate plan. You have to do more than just write down who gets what when you are creating an estate plan. In some cases, using a will in conjunction with trusts will help you to get your estate set up so it can be disbursed as you want when you die.
What are the benefits of trusts?
Trusts usually avoid probate, so your beneficiaries can access the assets you leave to them faster and without the cost of having to go through probate. Along those same lines, trusts can also help your loved ones avoid certain estate taxes. They also provide a measure of privacy since they likely won’t have to go through the publicly-recorded process of probate. You can even set up trusts to support a favorite charity when you pass away if that is what you choose to do with your assets.
What can I do with a trust?
Establishing a trust gives you control over how your assets are distributed. You can set up instructions that dictate who gets distributions and when. There are a variety of trusts to choose from, including an irrevocable trust or a revocable trust. An irrevocable trust can’t be changed, but a revocable trust can be. Those are some special considerations to think about when you establish a trust.
It is important to understand the specific requirements of various trusts. Some trusts can have a big impact on your assets and your beneficiaries, so make sure that you understand all the ways that trusts you are considering might affect those matters.
Source: Fidelity, “What is a Trust?,” accessed Aug. 20, 2015