Why should you set up a trust? Many estates include a trust, in which one party manages and possesses assets on another party’s behalf. It is common for parents to leave a trust for a child and have a responsible family member oversee this trust until the child is of legal age.
What are the benefits of a trust?
Why You Should Set Up a Trust
One of the most common questions to ask a trust attorney is: are there other reasons to have a trust besides leaving an inheritance for children? Yes, there are. Trusts are important for inheritances, but there are many other benefits, too.
Here are some further reasons to consider a trust:
#1: Your Trustee Will Not Have to Worry about Probate
A trust puts someone in charge of your assets in the event of your untimely passing. Usually, a surviving family member must schedule a court date/probate to validate your will. However, a trust makes it clear where your assets should go, preventing unnecessary court appearances.
#2: Your Medical Expenses Can be Handled
If you cannot make decisions due to a health problem or another issue, your trustee can get access to your assets. That means that they can take care of any medical or living expenses that you have. If no trustee is in place, your bills may be left unpaid and become delinquent, which can have various consequences. Creating a trust is a proactive step that keeps you in a good place financially.
#3: Keep Things Private
While wills can be on the public record in some areas, trusts are not. Therefore, if you do not want everyone to see how your assets are divided among family members, a trust is a suitable option. This gives you control over who gets your assets in a private setting.
#4: Save on Taxes
There are many tax advantages to trusts. A credit shelter trust (CST), for instance, comes with various tax credits. It can help your estate go to a significant other without ever incurring any taxes, including if the trust increases over time.
Conclusion
The reasons to have a trust extend far beyond entrusting your assets with a third party until your child is an adult. It is a vital estate planning step that can help you stay in a good financial position if you face a medical issue that impairs your decision-making abilities. It also benefits your taxes and saves a significant amount of time in court.
Consulting an estate planning attorney is the first thing to do if you are interested in setting up a trust. Here at Gravis Law, our trust and estate lawyers are experts in estate law, and we can help with estates of any size.
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