The website financialplanning.com posted a recent article, titled “Should Estate Plans Rely on Trusts?”,which explains that some folks use a living trust as a contingent beneficiary, typically when there are minor children. The trust will assign a guardian for the children until they are older. There are several reasons for using a trust as an estate planning tool, rather just using a will. Assets held in trust avoid probate at death, which is important in situations with property in multiple states. If a person passes away with property in a few states, probate in each state might be mandated.
Implementing a trust provides control for assets in the event of incapacity. A co-trustee or successor trustee will take over the management of the trust assets. Another nice thing about a trust is that it gives you maximum privacy, where a will is public record and open to all.
Trust language can be drafted to reduce or eliminate estate taxes, as well as to protect from divorce settlements and creditors. In addition, a trust can protect dependents with special needs. Ask your estate planning attorney about a special needs trust for your child with special needs—or about the other types of trusts that might benefit your circumstances.
An individual can use trusts in one of two ways. Some people will grant title assets to a trust while alive, and then the living trust terms will stipulate the distribution of trust assets at the grantor’s death. Other folks don’t have a standalone living trust; instead, they use a testamentary trust which is funded through a will.
Contact a qualified estate planning attorney to help you decide which way to go.
Reference: financialplanning.com (August 13, 2015)“Should Estate Plans Rely on Trusts?”