The most important document that you will likely mainly focus on as you draft your estate plan is your will. Your will documents your last wishes for who should handle your assets after you pass away and who should benefit from your estate. Despite being so important, a will has a few flaws.
With just a will, your estate could be taxed, which can lower how much of the estate’s assets your beneficiaries will receive. Your estate can enter a probate process when you use a will, which can delay how soon your beneficiaries receive assets by months to over a year. Furthermore, a disgruntled beneficiary or family member could dispute your last wishes. This can further delay the asset distribution process and can be costly to your estate.
Alongside your will, you can create a trust. A trust is a legal document that can complement your will. Here is what you should know:
What is a trust?
A trust is an arrangement between you and a trustee. The trustee is responsible for managing and distributing assets to beneficiaries at the appropriate time. By using a trust, you can avoid probate, estate taxes and disputes.
What are the different kinds of trusts?
There are many different kinds of trusts with unique legal wordage that can allow you to take extra measures in protecting your assets and make specific requests.
Many people use revocable trusts during their lives, which allows them to add and remove beneficiaries and assets when they wish. But, you could use an incentive trust to make clauses that must be met before a beneficiary can claim any trust funds. You could also use a pet trust to make your pet a beneficiary.
By reaching out for legal help, you can learn more about your trust options.