Many people think estate planning begins and ends with a will. While a will does form a key component of estate planning, a comprehensive estate plan may require other tools to meet your particular needs.
For instance, a trust may be something that would be beneficial for your circumstances. Here are some of the advantages that a trust can provide:
Life is unpredictable. You may change your mind about the beneficiaries you originally included in your estate plan. You may become active in a particular charitable cause and wish to add that organization as a beneficiary. You may get divorced, or you may welcome a new grandchild into your family – leading you to want to revise your beneficiaries. By creating a revocable trust, you give yourself the flexibility to make amendments to your trust as your priorities and life circumstances change.
If you create a will, your estate will have to go through probate – an often lengthy and expensive process to verify and distribute any assets listed therein. When a will goes through probate, it becomes part of the public record. By creating a trust and avoiding probate, you retain privacy and confidentiality surrounding your family’s financial matters.
With a will, your assets will essentially be handed over to your beneficiaries without any stipulations attached. A trust offers you more control over how your beneficiaries will use your inheritance. For instance, you could attach age restrictions on when younger beneficiaries will gain access to their inheritance. You could also specify how their inheritance must be used – such as for academic expenses. If you have a beneficiary who struggles to manager their finances, you can arrange to spread out their inheritance in increments over time.
A trust offers you more room to tailor the distribution of your estate as you see fit – as well as set your beneficiaries up for a more seamless inheritance. An estate planning attorney can help you learn more about this option.