Discussing death with anyone is never a pleasant aspect of financial planning, but it’s certainly one of the most important. While no one likes to discuss his or her own mortality, many wonder how they’ll be remembered. Perhaps you want your legacy to live on through the work of a charity, or desire to bypass the probate that is associated with a will. Whatever the reason, a trust may be an excellent option to consider.
Trusts, simply put, are a way to transfer assets and property into one legal entity. One of the biggest benefits to a trust is that when properly established, probate court and legal costs associated with a will can be avoided. A trust provides greater protection than a will against legal action from anyone who is unhappy with the distribution of assets and decides to challenge it. Also, a will is a matter of public record, while a trust, when established properly, is not.
Many important uses of trusts do exist. Trusts can minimize possible conflict between heirs when an estate is being settled, set out how assets are distributed to beneficiaries, who inherits property, as well as who has the right to use it and under what conditions, and how and when money is disbursed for children or grandchildren’s educational expenses. A charitable trust is a popular way to transfer assets such as money, real estate, or art, and designate that they eventually be given to a specific organization. Trusts can also help manage your clients’ affairs if they become unable to do so. Many set up trusts to prepare for the possibility that they may become disabled or ill before their death, and thus unable to manage their assets properly.
Aside from a will, trusts provide additional options for making certain that a legacy lives on. Trusts can help manage property and assets and make sure they are distributed after death according to your wishes.