Like wills, a trust is a vital estate planning tool that sets a more straightforward pathway for future generations in your family. However, a trust can essentially be your pass to stay out of probate court, unlike a will. A trust also ensures assets are fairly distributed according to the terms you’ve outlined, given your next of kin continuous support once you’ve passed.
Though trusts are more expensive to create and maintain than wills are, the benefits they ensure your children have something precious to look forward to when they grow up.
What’s the Difference Between a Trust and a Will?
A will defines how you want all financial and personal affairs to be looked after once you’ve died and outlines asset distribution. It also lists your debts, any property, and deposit box contents. However, a will leaves your business exposed to the public as any content in the will must go through probate. With a few exceptions in states like California and others, you can’t avoid hiring a probate attorney, and those kinds of attorneys are expensive.
A trust, by contrast, gives you more control over asset transfer. When you set up a trust, you’re giving another party the authority to attend to your assets for the sake of your beneficiaries. The beneficiaries, your children, are protected from creditors. You can create a living trust, a trust created while you’re alive that keeps your property away from the probate court, or a testamentary trust to protect your assets.
How Do You Set Up a Trust?
To set up a trust, you should first identify your goals, get a clear picture of how many assets you have, and determine the benefits your children will receive when you transfer your assets to them.
Once your goals are established and your get a full scope how many assets you have, you should hire an experienced estate attorney to ensure your trust is appropriately executed. The trust will help your children avoid inheritance taxes, and your attorney will see to it that your trust never sees the light of day in court, allowing your family to handle succession plans privately and quietly.