For many people, a will is sufficient for estate planning purposes. However, there may be situations when a living trust better fits an individual’s needs. For instance, those who care about their privacy may want to create a trust. Assets in a trust generally don’t go through probate, which is the process of distributing assets after the head of an estate passes away. In addition to being a public process, probate is also time consuming and expensive.
Those who wish to give to charity at some point may want to consider a charitable remainder trust. This type of trust provides a consistent income stream for its creator and any beneficiaries. After a predetermined amount of time has passed, whatever is left in the trust goes to charity. This helps create a philanthropic legacy and reduces the tax burden of the estate.
Anyone who wishes to exert maximum control over the future of their assets may want to create a trust. The language of a trust can be customized to meet the needs of its creator and decrease the odds that assets may be mismanaged by future generations. For instance, it may be possible for a parent to distribute assets to a child in installments as opposed to all at once.
Estate planning can often be a complex process. An individual who wants to set up a trust may want to talk with an attorney who has experience creating such documents. Those who already have a trust in place may wish to review it with legal counsel regularly to ensure that it still meets their needs.
Kevin Tharpe
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