You may think that drafting a will is all you need to do when planning for your family. But if you want to ensure the assets you’re handing down follow your intentions, there could be another important ingredient you need to add.
Even though it could be a crucial part of planning your estate, only 17% of Americans have a trust in place. A trust can work alongside your will to help provide specific avenues for protecting and providing for your family’s future.
Benefits of trusting
Trusts will carry on when you are no longer around, and hold several advantages over divvying up all your assets through a will:
- Specific causes: If you have exact intentions for some of your assets, make sure those specifics are followed by assigning your property to a trust. Trusts can have a clear-cut purpose, like paying college tuition, helping with mortgages or donating to charitable causes.
- Special needs: An inheritance with the best intentions may make a loved one with special needs ineligible for assistance benefits. A funded trust can provide enough benefits to increase their quality of life while still staying in the bounds allowed by government programs.
- Avoiding probate: When you pass on, your assets may need to go through probate court to assign them to beneficiaries. Since your trust continues on after you are gone, end-of-life processes may not apply to a trust. Avoiding this step altogether can save your family a good deal of time and money.
- Saving on taxes: Moving your assets to a trust can remove them from your estate. This can make a big difference if your estate qualifies for an estate tax. When it comes time to figure out what you owe, these items likely no longer belong to you and are instead part of the trust, and will reach your benefactors closer to how you left them.
It will be a difficult time for your family when you’re no longer around to look after them. Plan out your trusts to make sure you save them from hardship where you can and continue to provide for them after you’re gone