There are many benefits to setting up a trust, both for you and your family. A trust is a component of an estate plan which allows you to transfer or gift a portion of your assets without completely losing control of them. This is done by transferring them to a third party, called a Trustee. The Trustee will then administer the assets as you instructed to the beneficiary or beneficiaries. Here are several reasons it’s beneficial to set up a trust, compiled by our estate planning attorney in Fairfield, NJ.
Trusts May Offer Tax Benefits
While trusts are not only for wealthy individuals, one benefit is that a trust can reduce estate taxes for people who have substantial estates. When you transfer some or all of your assets into a trust it can reduce the overall taxable amount from your estate. There are several different ways to do this via setting up a trust, so we recommend you speak with your estate planning attorney to discuss your options and decide what’s best for you.
A Trust Is Very Specific
Sometimes people pass away and leave ambiguous instructions in their wills, or their estate plan can be contested in court. When you create a trust you have complete control over who receives your assets, and on what terms they are able to receive them. For example, if you want to gift your child $20,000 but only want them to have access to the money once they graduate from college, a trust allows you to do this.
Possibly Avoid A Probate With A Trust
Probate is the legal process by which a will is “proved” in court, and a judge must declare that the will is a valid representation of the deceased’s wishes. Most trusts don’t go through the probate process at all, allowing your assets to be transferred smoothly to your designated beneficiaries. Probate can be expensive and time-consuming, so avoiding it is recommended.
If you want a guarantee that your spouse and your children will be taken care of after your death, consider creating a trust. Divorce, remarriage, and blended families are very common, but complications can arise when it comes to inheritances. Creating a trust ensures that the rightful inheritances go to the beneficiaries, even if their family circumstances change in the future.
If you’d like to learn more about setting up a trust and how it can benefit you and your family, or if you have any other estate planning questions, please contact our team at SCC Legal today.
Originally published at: https://www.scclegal.com/reasons-to-set-up-a-trust/