Why trusts can help the estate planning process

On Behalf of | Jun 20, 2019 | Firm News, trusts

Trusts can be an important part of the estate planning process for many people in North Carolina. Since they offer greater privacy and flexibility, people may opt to create a trust to handle matters in a way that may be far more challenging when using a will. Trusts are one part of a complete estate plan that can also provide additional discretion for their creators as well as their beneficiaries. Many people want to avoid probate court as it is a public process that can open assets up to scrutiny. In addition, probate costs can be expensive and the process lengthy, especially when significant assets are involved. Trusts distribute assets without going through this process.

In addition, a trust can also be structured to protect against future incapacity. When the trust is created, the creator can remain the trustee controlling the funds. The trust itself will own the assets placed inside. However, when the trustee becomes incapacitated, the trust can be structured to ensure a successor takes over to manage the property. Trusts can provide greater control over how assets are distributed to heirs, preventing the funds from being lost to irresponsibility or to a divorce settlement.

Trusts are also popular for distributing assets to minors because they can be structured to provide benefits over the years until the principal of the trust becomes available after the beneficiary comes of age. There are several different types of trusts that people can create, including both revocable and irrevocable. Revocable trusts generally become irrevocable upon death.

There are myriad reasons why people may opt for trusts, including tax protection or creditor protection. People thinking about how to best structure their assets for the future can consult with an estate planning attorney about how trusts may be suitable for their needs.