Although to most people known as a privilege of the rich, trusts can be the best way to achieve your financial goals. They might prove especially helpful in situations that involve ensuring that in case something unexpected happens, you and your loved ones will be taken care of.
For starters, trust can last a long time. While they used to have limited lifespans, the recent rise of the dynasty trust led many states to allow almost ridiculously long periods. For example, in Wyoming, it’s 1,000 years maximum, while in Nevada, it’s 365 years, and South Dakota allows a trust to go perpetually.
What is more, trust will enable you to keep your business private, even after your death. Certain types of trusts can also protect you and your family from creditors by leaving the assets within the trust beyond the reach of litigation or attachment.
There’s no denying that trusts can be complicated, but when used correctly, they can also prove incredibly handy in solving your estate planning challenges, so you want to learn how to choose an estate planning attorney to best help you.
You Can Design Your Trust To Fit Your Goals
Some of the most popular trusts are designed to protect people from their own financial mistakes. For instance, some might choose to set up a trust to ensure that their children will always afford an education without taking out unsubsidized loans. Others might want to make sure that their family can always afford their prescription medication.
Furthermore, using a living trust can save you money. A living trust is all about protecting your assets, but there’s a way in which it can save you money — by cutting down on probate costs. Probate is complicated and can last for almost a year, which means that your estate will need to pay attorney fees (which can amount to tens of thousands of dollars) and court costs. What’s more, when you die, your assets will be tied up until the probate process is over, which also means that they won’t be earning you interest while you’re gone. By using a trust, you can avoid all of these additional costs and tie-ups.
You can also consider an inheritance advance, also known as an inheritance cash advance or estate advance. It allows you to access your pending inheritance immediately instead of waiting for the lengthy probate process to end. As a result, you can get fast cash from part of your inheritance while completing the probate process.
A Trust Is a Simple Way To Keep Control of the Assets
When it comes to estate planning, people often think that trusts are only useful as a way to shield assets from potential creditors, but there’s more to them than that. They can also be used as a way to ensure that you maintain control of your assets after your death. As a result, trust can be useful if you, for example, want to keep a business out of the hands of a potential heir until they reach a certain age.
Furthermore, you can name a protector for your assets. Not all trusts have a trustee — some have a protector instead. If you’re creating a trust for minor heirs, you might want to name a protector instead of a trustee. It is someone who manages the assets of the trust until the beneficiaries are old enough to take over. You can then either move the assets into their trust or have them continue managing it once they reach adulthood.
A Trust Can Resolve Family Conflicts
When naming beneficiaries for your estate, it’s essential to consider how they feel about each other and how likely they are to get along. A trust can be a great way to ensure that everyone gets what they deserve while also preventing conflict after your death.
For example, if there’s only one child, it might be enough for them to get everything outright — but if there are multiple children, it might be worth setting up a trust so that no one feels left out. On the other hand, if there are children from different marriages or relationships, it can also present a problem when it comes time to divide up the estate. Simply put, trust can ensure that each child receives their share.
A Trust Can Shield Property From Creditors
If you’re concerned about what would happen to your family if you were sued or owe more money than you can repay, a trust could be the solution you need. Certain types of trusts are designed to hold your assets beyond the reach of any creditors, ensuring that, even if you are sued, the property isn’t distributed according to state law. It will also ensure that your beneficiaries can receive their inheritance without being taxed or paying creditors.
Also, you can change your trust at any time. Once you’ve created a trust, you still have the freedom to make changes as needed. If your circumstances change, such as an addition to your family, a change in your business, or a new financial goal, you can modify your trust accordingly. You’ll want to make sure that you always keep copies of your trust and any amendments that you make because only the original document will be legally binding.
Your Trust Can Be More Flexible Than Your Will
Many people mistakenly believe that trusts are only used to pass wealth on to the next generation, but this isn’t true. You can use the trust to protect your family while you’re still alive or to leave gifts for special occasions throughout the year. Trusts are also incredibly flexible — if you change your mind down the road, you can even change the terms.
You can also leave a more personal message with your trust. Wills are often dry and impersonal — after all, they’ve been prepared by someone else and focus on legal, not emotional, boundaries. A trust, however, can be a much more memorable way of dealing with your loved ones and saying goodbye. For example, you could leave a video message explaining how you feel about them and why they mean so much to you.
Trusts are often seen as complicated documents used only by the superrich, but they’re actually incredibly flexible tools that you can use in all sorts of ways. You can design your trust to fit your current situation and financial goals. Besides, trusts tend to be much more flexible than wills and can effectively shield your property from creditors.
If you want to learn more about trusts, the best thing that you can do is to speak with an attorney who specializes in estate planning. They will be able to walk you through all of your options, explain how each trust works, and help you choose the one that will work best for your situation.