Four Advantages of Trusts - Adviser Investments

Four Advantages of Trusts

February 3, 2022

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Wills and trusts both have advantages, but trusts often have the edge with estate planners—in large part because they avoid the probate process, which can be long, drawn out and public. These are a few reasons why trusts are a popular financial planning tool:

  1. Faster resolution. Assets placed in a trust 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. Trusts make it easier to ensure the money you pass on is used as you wish. While a will bequeaths funds to a named individual or institution, beneficiaries can generally spend them how they please. With a trust, the grantor can establish a series of instructions that restrict what the inheritance 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. Be sure to consult an estate attorney to learn more about your options—and if you need help understanding what’s best in your situation, 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).


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