You may have a will, but perhaps you are becoming concerned about the probate process. You have probably heard that it can be expensive and that the distribution of assets to your heirs may take months, if not years. For the sake of comparison, perhaps you should look at the advantages of setting up a trust. There are many different kinds, but you will probably want to focus on two major distinctions: revocable versus irrevocable trusts.
A living trust is flexible
You can place your assets into a revocable or living trust and thus keep them from being probated. You can name yourself trustee and maintain control of the assets during your lifetime, and the trust becomes irrevocable upon your death. You can also name a successor trustee who will take charge of managing your assets and see that you receive the proper care if you should become incapacitated. Assets can remain in your trust after you die, if you so direct, to be held until a beneficiary reaches a certain age, for example, or to be used for the care of a loved one with special needs. You can make changes to the trust or dissolve it at any time in the event your intentions or circumstances change.
An irrevocable trust cannot be altered
If taxes are your main concern, you might consider an irrevocable trust, which transfers assets out of your estate, thereby serving to reduce or eliminate the estate taxes that would ordinarily be due. You would also be relieved of tax liability on the income produced by any assets held in trust, and those assets might be protected in case a legal judgment should be made against you. Keep in mind, however, that once this kind of entity is established, you will lose control over the assets, you will not be able to make any changes to the terms, and the trust cannot be dissolved.
Overall advantages of trusts
A trust will allow you to control your wealth. You can specify the terms and direct when and to whom distributions of assets are to be made. You can protect your estate from beneficiaries who are not good money managers and from the creditors of heirs. As compared with probate, which is a matter of public record, a trust allows for privacy because a major goal is for your assets to pass outside of the probate process. Distributions can also be made much more quickly through a trust set up than through probate.
Seek professional help
Establishing a trust requires legal assistance. If you are looking for answers regarding this kind of fiduciary arrangement and wondering whether setting up a trust is the right step for you and your family to take, an attorney experienced in estate planning is standing by to help.