As an Estate Planning and Probate attorney, it is my duty to wash away any preconceived notions about estate planning to help my clients. One of the biggest misconceptions I come across regularly is about Trusts. The result is that we rarely consider Trusts as an option to safeguard our own legacy.
Trusts, however, are not just for the rich. There are several important reasons why anyone should consider a trust.
A trust can help parents plan for the well-being of their child by pre-determining when and how they inherit. A trust enables you care for your child’s health, education, maintenance, and support until they reach an age when they are financially responsible and equipped to handle a significant amount of money. Also, if your child is special needs, a trust can ensure that your child is taken care of by outlining a lifetime plan for their financial care.
A trust can bypass the probate process, which can be long, complicated, and expensive. Even if you have a Will and a “simple” case, you can count on your loved ones investing up to a year to settle your estate. You cannot predict with certainty how beneficiaries (and those left out) will react or how the courts will rule on your estate. A trust can avoid probate and ensure that your estate is handled by a person you trust, your assets are left to those you choose with a plan you thoughtfully created.
Probate is a public process. Anyone can access the records regarding your estate’s probate matter and see the who, the where, and the what. A Trust is established privately and protects your beneficiaries and the estate in question from the public eye.
Let’s Define Some Key Terms
Trust: A device used to avoid probate and provide management of your property, both during life and after death.
Grantor: The person who creates the trust and funds it (allocates assets into the trust).
Trustee: An individual or entity in charge of carrying out the plan outlined in the trust.
Beneficiaries: Those set to receive the assets within the trust.
Hopefully, you have a better idea of what a Trust is and how it can help you and your loved ones. So how do you begin the process of creating one?
1) Estate Planning Attorney: Creating a Trust is a complicated process. You need to work with someone who specializes in this area of the law – your estate depends on it. Contact an experienced Estate Planning Attorney who can guide you through the creation process. If you’re unsure about any of the next steps, see step 1 – call an estate planning attorney! She/He should guide you through the rest.
2) Assets: Know what you are working with. Have a complete and detailed record of your assets and debts.
3) Beneficiaries: Choose who you are leaving everything to and how you want them to receive it.
4) Trustee: The word says it all. Your Trustee should be someone you trust and have faith in that they will follow your wishes. This person should have a good understanding of what their role is and be capable of performing it.
5) Financial Advisor: Speak to a financial advisor regarding investment of your assets to understand all your options.
We all have a legacy to leave behind, and with the right tools, we can secure the life we’ve built, keep that plan private, and have peace of mind about what happens with our estate if we are incapacitated or after we pass.
To learn more visit our website at www.steelecounsel.com
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Read NerdWallet’s article about trusts at Trusts
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