A trust is a popular estate planning document among many people. It allows you to transfer ownership in the name of a trust while still letting you have access to the assets during your lifetime. When you die, the person you appoint as trustee will manage the assets in your trust. Knowing whether you should create a trust depends on your unique goals.
Here are a few signs that you should consider a trust.
You Want to Support a Family Member with a Disability
If you have a child or another relative with a disability, you may worry about what will happen to the person when you die. You want to make sure that your family member has enough financial support. In this situation, it may be a good idea to establish trust for the person. This way, you can give your family member financial support without jeopardizing his or her government benefits.
You Want More Control Over Asset Disbursement
A trust gives you greater control over asset disbursement than a will. For instance, if you want your child to receive an inheritance at any age he or she is responsible to handle it, you can state that in your trust.
You Like Your Privacy
A will goes through probate, which is public record. Anyone will be able to get access to your financial information. If that makes you feel uncomfortable, you have another reason to consider setting up a trust. Since a trust does not become public record, your information will remain private.
You Want to Protect Your Assets from Creditors
If you only have a will, your assets will not be protected from creditors. After you die, creditors may be able to go after some of your assets. If you want to make sure that all of your assets go to your beneficiaries, you may want to establish a trust. It can shield your assets from creditors.
You Want to Avoid Probate
Probate is the legal process in which a will is proven valid in court. The process can take a lot of time and cost a lot of money. Your beneficiaries may have to wait a while to receive their inheritances. If you would prefer for them to get their inheritances faster, you may want to create a trust. Assets in trusts don’t have to go through probate.
You Believe Someone May Contest Your Will
If someone believes that your will is unfair, he or she may decide to contest it after you die. Contesting a will can drag out the entire process and make everything more stressful. If you want to avoid this for your family, think about creating a trust, as it is more difficult to contest.