It helps to look ahead when making your estate plans and plan for unexpected occurrences that may negatively affect your estate. A lot can happen when you are gone, and it may be too late to save the day.
Picture a situation where your kin defaults on a debt, leaving the creditor no option but to repossess their assets. When this happens, your family fortune may end up with third parties, yet you had intended it to trickle down to future generations.
A trust offers some protections
There are several reasons why you should consider including a trust in your estate plans. First, it will help you avoid the probate process, which can be expensive and time-consuming. Beyond that, a trust can protect your assets in various ways.
In the scenario depicted, creditors cannot come after trust assets to recover debt even if your kin is a beneficiary. This is because the beneficiaries are not the legal owners of these assets, and they cannot sell or transfer them to others. Trust assets are also safe during divorce proceedings and will not be split between the splitting couple.
A trust can also help you avoid misappropriation or mismanagement of the family wealth by your beneficiaries. You can choose a professional trustee with the ability and experience to manage your family fortune on behalf of your loved ones. It also gives you more control since you can decide how your estate should be handled long after you are gone.
Choosing the right kind of trust
The right kind of trust can help you achieve your estate planning objectives. Therefore, it is worthwhile to understand the full range of trusts available and how they work before settling on the best fit.
When done right, these estate planning tools can supplement your estate plans and give you peace of mind that your descendants will be in safe hands in the years to come.