Facing the prospect of your death is not something you enjoy doing. However, failing to plan may further tax your family at a time when emotions already run high. A trust account may prove a valuable fiduciary instrument you may add to your estate plan.
The role of a trust depends on the type you choose. Discover more about what a trust can and cannot do for your loved ones and you.
What is the point of a trust?
A trust holds assets and property, removing them from your name and putting them away to benefit those you name. Doing this makes it easier to transfer once the terms of the trust become activated. Anything you put in a trust bypasses probate and goes directly to those named.
What rules dictate a trust?
An incentive for trust creation is autonomy when setting out when heirs inherit. For example, you can set age benchmarks for your children, giving them pieces of the trust at intervals. You can also appoint a third party to oversee administration.
What are common trust types?
Each trust type has rules and regulations around who can access the assets and when. One reason you may consider moving things into a revocable trust, for example, is it allows you to transfer money and property back and forth between it and your inventory as you may need.
However, one of the cons of a revocable living trust is that the items within it may face seizure should you become the subject of a lawsuit or file bankruptcy. If you want the items to remain protected, you should consider an irrevocable trust. The drawback is you can no longer dissolve the trust once created.
One or several trusts may benefit your estate. Discuss what works with someone with experience in creating and administering trusts.