Many tools exist for estate planning. They could include a living will, power of attorney documents and even a trust. Some people discount trusts or ignore the benefits that they could offer, but they are an important consideration.
Trusts are not just tools used by the incredibly wealthy, but rather have benefits that it can apply to people in a broad range of situations. If you are about to complete your estate plan or revise it, you may want to consider including a trust.
Trusts protect your assets from creditors and taxes
Do you have substantial debt or receive Medicaid benefits? Do you anticipate that you could accrue debt or need Medicaid when you get older? If so, using assets like your home and financial accounts to fund a trust can be a way to protect them from claims by creditors, including government insurance plans that may try to recoup benefits they paid on your behalf before your death. If you have a relatively large estate worth millions, placing assets in a trust can protect those assets from taxation.
A trust makes it harder for people to challenge your wishes
Family members can and do bring challenges against someone’s estate for many reasons. Such a challenge can vastly diminish the value of an estate because of probate and attorney costs. By using a trust to structure your estate plan, you help reduce the likelihood of a challenge.
A trust gives you more control over the use of your assets
When you use a trust in your estate plan, you can control how much of the inheritance someone can access at one time and how they use it. If there are assets left when the beneficiaries die, you also potentially can leave instructions about where you would like those assets to go, such as to a charity you support.
Creating a trust could be a way to maintain control and to feel confident that your loved ones will adhere to your wishes. If you’re interested in learning more, talk to an attorney today.