When creating an estate plan, there are steps you can take to help protect your assets and streamline the process for your beneficiaries.
Depending on your finances and the scope of your estate, you might benefit from creating a trust. Using a trust enables you to maintain control of your estate while helping your heirs avoid probate and associated costs.
Advantages of trusts
When estates do not use trusts, beneficiaries often must go through the probate process to manage and transfer the assets. Probate can be costly and take a long time, especially for larger estates. However, you can keep some of your assets from passing through probate by placing them in a trust. In addition, using a trust helps protect your privacy, as property that undergoes probate is public record.
Creating a trust
Working with legal and financial professionals, you can determine which assets you should place in your trust. Generally, you cannot transfer life insurance and retirement accounts to your trust, but most other assets are eligible. You also need to name a trustee to administer your property. You can name yourself as a trustee, but you must choose a successor trustee. In addition, you can name a reliable individual or select an institution to oversee your trust. When developing your trust, drafting clear and thorough documentation is important. A well-written trust can help your beneficiaries avoid future disputes.
You can help your beneficiaries manage the transfer of your estate with a trust. If you are creating your estate plan, establishing a trust can safeguard your financial assets and property.