Some people think creating an estate plan is all about writing a will, but that is only partly true. You can now choose from several estate planning tools that help give you better control over your assets at any stage of life. For instance, instead of writing a will, you can create a trust. There are several reasons you might want to do that.
Avoiding probate
The probate process can be lengthy; the longer it takes, the greater it might cost your loved ones. Unfortunately, a will usually has no legal effect unless it goes through probate. Some people circumvent probate by transferring their assets to a trust, which generally distributes them after they pass away.
Providing detailed instructions
Often, wills simply contain directions regarding who gets which assets. Trusts usually allow you to be more specific. For instance, you can instruct your trustee to distribute your assets a certain way or over a set period. You may also specify conditions or structure the trust specifically to minimize the impact of taxation.
Achieving different goals
A last will is generally straightforward, function-wise. On the other hand, trusts come in different forms that can help you achieve various goals. For example, a charitable trust supports your chosen cause, while a generation-skipping trust enables you to provide for remote descendants.
A trust is complex but can be a brilliant estate planning tool if you maximize its capabilities and benefits. An estate planning attorney can help you understand the law and create trusts that meet your needs.
