Getting your estate plan together means taking the time to think about the best ways to use your assets to help your loved ones when you’re gone. You must ensure that you establish who will get what so your wishes can be followed.
While some people think they can do this with a will, that’s not always the best way. Trusts are often a viable option that gives you more control and offers more benefits. Trusts are classified as either revocable or irrevocable. In the simplest terms, a revocable trust can be changed, but an irrevocable one can’t.
A big trade-off
Once you create and fund an irrevocable trust, the trustee takes over control of the assets. The only way you can change or dissolve this type of trust is if you have the agreement of all beneficiaries or with a court order. The fact that you don’t control the assets is the basis for what’s arguably the most important benefit of the irrevocable trust.
Because you don’t control the assets in the trust, they’re protected from your creditors. This makes irrevocable trusts a great option for people who have high-risk professions because the contents of the trust can’t be touched if there’s a judgment against them.
An estate plan is an important way you can care for your loved ones after you die. Trusts can be a good tool to use if you want to pass assets easily. Working with someone who’s familiar with your needs and who can offer insight about the possible options may help you to get things set with as little stress as possible.