Should You Include a Trust in Your Estate Plan?
When people think about estate planning, they often think about a will. But did you know that trusts are another powerful tool you can use to protect your family and your belongings? A trust is a legal arrangement that can help manage your assets and give you control over how and when they are passed on to others. Let’s explore whether you should include a trust in your estate plan and how it can benefit you.
What is a Trust?
A trust is a special way to hold and protect your property, money, or other belongings for the future. With a trust, you can choose someone to manage your things (called a trustee) and decide who will receive them (called beneficiaries). Trusts are a great way to make sure your wishes are carried out, especially if you have children, want to save on taxes, or want to control how and when people receive your assets.
How is a Trust Different From a Will?
While both a will and a trust help you plan for the future, they work in different ways. A will only goes into effect after you pass away and explains how your property should be divided. A trust, on the other hand, can start working while you’re still alive! It helps manage your assets over time, even if you’re unable to do so. A trust also avoids probate, which is the legal process your will has to go through in court. This can save your family time and money.
Why You Might Want a Trust
There are many reasons you might want to include a trust in your estate plan. If you have young children, a trust can make sure they receive their inheritance at the right time, like when they turn 18 or graduate from college. A trust can also help if you want to make sure someone is taking care of your things if you get sick or need help managing your money. Additionally, trusts can protect your loved ones from paying too much in taxes or legal fees.
Different Types of Trusts
There are different kinds of trusts, and each one can serve a different purpose. Some of the most common types include:
Revocable Trusts: You can change or cancel these while you’re still alive. They help manage your assets if you can’t.
Irrevocable Trusts: Once you create these, you usually can’t change them, but they offer more protection from taxes and creditors.
Special Needs Trusts: These help provide for a loved one with special needs without affecting their ability to receive government benefits.
Conclusion
Including a trust in your estate plan can give you greater control over how your assets are managed and distributed, while also providing valuable protection for your family. Whether you want to make sure your children are cared for, avoid legal hurdles, or manage your assets in case of illness, a trust can be an essential part of your plan. Trusts can help simplify the process and offer peace of mind, no matter your financial situation.
At DK Law Group, we can guide you through the entire estate planning process, including setting up trusts to fit your unique needs—give us a call at (443) 739-6724 or email us at diana@dklawmd.com to get started today.