Planning for the future also means planning for the unexpected and the end of life.
While a will directs who receives your assets, a trust lets you name a legal trustee to ensure that how you want your property and assets distributed happens as it should. Among the many reasons to consider establishing a trust, the following three rank high.
1. Control assets
The addition of a trust puts more control in your hands. Since life always comes with uncertainties, a trust provides versatile planning. For people who still have young children, it enables you to dictate how they will receive their inheritance. You can establish that a beneficiary only receives money after turning a certain age or set limitations regarding how much money gets distributed every year. People with hobbies or passions often use trusts to ensure to establish donations.
2. Protect beneficiaries
According to a Caring.com survey, while one in two people know the importance of having a will and trust, only 33% have official documents. Without a will or trust, your beneficiaries may end up dealing with the probate court. Even only having a will means going through probate. Assets listed in a trust do not get included in probate.
3. Protect yourself
Estate planning often conjures up the image of your final days, but other life events can happen that make having a trust beneficial. If you face an unforeseen illness or get incapacitated in some way, your named trustee will manage your financial needs, including managing your assets and paying bills.
If unsure about a trust, consider it a planning tool that lets you manage your assets now while simplifying their distribution when needed.