There’s a certain stigma attached to trusts, which seems to be that only the rich and powerful can utilize one – but this couldn’t be further from the truth. Even those with a modest amount of savings can gain set up their own trust, and there are many different ways for your average joe to utilize them.
Trusts Provide More Control Over Your Assets
By and far the most common reason for creating a trust, they allow for more specific control over how the assets of your estate plan will be distributed. When a trust is created, the creator of that trust will name its beneficiaries, or those who will receive the assets from the trust. They may also name a trustee, who will control the trust and the distribution of assets to beneficiaries. Often, a trust is created to specify when the assets are to be distributed to the beneficiaries in cases where the beneficiaries are currently too young to receive them. By naming a trustee and specifying the details of when the assets should be distributed, trusts are able to provide more control over the timing of distributions than a will on its own.
In addition to controlling how assets are distributed, a trust can also control when they take effect. Different types of trusts take effect at different times. A living trust is the most common type of trust and only takes effect after the trust owner passes away. This way, the details of their plan are followed only after their passing. Revocable living trusts, however, can be altered or removed at any time, but provide less protection than a standard living trust. An irrevocable trust is just the opposite, and cannot be changed, but provide even more protection than a living trust because they are considered completely separate entities from the creator of the trust.
Trusts are also normally considered for the benefit of avoiding probate. If only a will is used in an estate plan, the property distributed by it will at some point have to pass through probate before it will be distributed to the beneficiaries. When a trust is used, the terms of the trust are considered final and do not need to be put through the process of probate, saving your loved ones a significant amount of time and money through legal fees. Because probate is avoided, a trust will also prevent the assets from becoming part of public record as they pass through the legal system.
If the benefits of a trust are appealing, consider adding one to your estate plan today. For help crafting a customized estate plan that works for you, contact Ledwidge & Associates – we work closely with you to create a plan that meets your needs.
Ledwidge & Associates
