Going about planning your family’s financial future is a critical and sometimes stressful prospect. You want to make sure they have everything they need should something happen to cause your sudden death.
One tool used by estate planning lawyers is a trust. This haven for money and property alike has many benefits for the trustor, or grantor, and trustees alike. Even while living, you can enjoy some of the perks of having something like this setup. Discover some of the ways a trust can help you plan for the worst-case scenario.
The Purpose of a Trust
A trust is a financial tool that holds assets for the benefit of the trustor and beneficiaries. It can be used to give tax shelter to assets. It can also be used to pass money after death quickly. A trust is an account that benefits a beneficiary. The trustor creates it for the benefit of the trustee. A trustee may wind up administering it on behalf of a third-party beneficiary, as can happen if you die with minor children. A trust can protect money and allow a trustee to hold it for the benefit of the minor children.
Control Over Money
The trustor places assets and property into the trust and grants these things to a trustee. Trusts get created to help control how money is handled and managed, usually after death. For example, if a trustor wants to leave money to heirs but disburses it in increments, the trustee follows the schedule and only dole out the amount in intervals indicated in the trust. The beneficiaries would receive the money accordingly.
A particular advantage of a trust is it does not have to go through probate upon death. The terms of the trust being as they are, the trustee takes over immediate ownership of what is inside the trust. It is up to the trustee to act as a representative and disburse the trust. Therefore, any heirs get immediate access to the money that was granted to them without the hassle of probate.
Creditors Do Not Have Rights
Since the trust is outside of probate court, it is not included in an accounting of assets that can be used to pay creditors. When debts get paid, they have to come from other areas of the estate and not the trust. Hence, it protects money from creditors.
If you are interested in learning more about what a trust can do for you, contact an estate planning attorney for assistance. It may wind up being a great way to keep your assets safe for the sake of your family.