Four Advantages of Trusts

Wills and trustsA legal document that functions as an instruction manual to how you want your money managed and spent in your later years as well as how your assets should be distributed after your death. Assets placed in a trust are generally safe from creditors and can be sold by the trustee in short order, avoiding the lengthy and costly probate process. both have advantages, but trusts often have the edge with estate planners—in large part because they circumvent the probate process, which can be long, drawn out and public. These are a few reasons why trusts are a smart and popular financial planning tool:

1. Faster resolution. Assets placed in a trustA legal document that functions as an instruction manual to how you want your money managed and spent in your later years as well as how your assets should be distributed after your death. Assets placed in a trust are generally safe from creditors and can be sold by the trustee in short order, avoiding the lengthy and costly probate process. are generally safe from creditors and can be disposed of (i.e., sold) by the trustee in short order. By contrast, under probate it can take months or years for debts to be paid and heirs to be notified before beneficiaries receive assets they’ve inherited. And documents filed in the probate process usually become part of court records, opening up your bequests to public scrutiny.
2. Greater control. TrustsA legal document that functions as an instruction manual to how you want your money managed and spent in your later years as well as how your assets should be distributed after your death. Assets placed in a trust are generally safe from creditors and can be sold by the trustee in short order, avoiding the lengthy and costly probate process. make it easier to ensure the money is used as you wish. While a will bequeaths funds to a named individual or institution, recipients can generally spend them how they please. With a trust, the grantorThe creator of a trust who owns the assets to be transferred. can establish a series of instructions that restrict what the grant may be used for.
3. Greater flexibility. Many types of trusts allow the grantor to access the assets during their lifetime. This makes it easier to adjust your estate plan as needed. If a grantor becomes ill, for example, it’s easier to create provisions within the trust that assign funds to cover debt and expenses during the grantor’s disability.
4. Less complexity. If you have real estate or other assets in multiple states, or if your heirs live in different locations, a revocable trust may help you reduce complexity by avoiding the need to establish a probate case in each separate jurisdiction.

There are many types of trusts.  If you need help deciding which options meet your needs, give us a call. We’re happy to help.

For more on trusts, listen to our podcast (Your Legacy’s Instruction Manual: Trusts and How to Use Them) or read our blog post (Advanced Estate-Planning Strategies).